Everyone knows the iPhone and iPad are top of the range mobile gadgets and that Apple don’t design things for a price but for a function. However new research brings into question how inflated these prices are. New figures from analysts at Raymond James Equity Research shows that Apple are indeed raking it in and making a lot more money on each product sold than any other competitor.
The new Raymond James Equity Research reveals the following startling figures; In the second quarter of 2012 Apple shipped only 6 per cent of smartphones and tablets, despite this the company took in 43 per cent of the total industry revenue. If you think this is a great achievement the following statistic will blow your socks off; from its 6 per cent of sales Apple made 77 per cent of the industry’s operating profits!
In the second quarter of 2012 Samsung has undoubtedly had success in its sales figures. The Korean company shipped about 52 million smartphones, nearly twice the amount that Apple shifted. However Samsung make a lot less on each phone sold, which could mean you are getting better raw value from a Samsung than an Apple iDevice. However raw hardware value for money isn’t everything, it could be argued that Apple spends a lot more resources on innovations in product design, software design (iOS & apps) and some intangible qualities to enhance its products in the eyes of the consumer. Design and innovation isn’t cheap and innovation is risky.
Apple pull in the profits
Travis McCourt at Raymond James says “Ultimately, profits are the feedstock of innovation; and, innovation drives profits. Until Samsung starts generating more profits than Apple, we would not be overly concerned with who has the unit share lead. Remember, HP and Dell still sell a lot more PCs than Apple sells Macs, but does it matter?” Profits are indeed of utmost importance but iPhone sales for Q2 2012 (Apple’s Q3) were 26 million compared to 35 million in Q1 (Apple’s Q2). If the iPhone 5 isn’t as rip roaring a success as previous generations then something has to give. Perhaps the company may have to resort to offering better value to customers if the iPhone 5 isn’t innovative enough. From early indications the next gen iPhone is just “the same but more of it” and iOS 6 is also not a very inspiring advance.
Do you think the iDevice products are really worth the money or are people falling for Apple’s prestige pricing tactics?