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This is a good thing if you want a truly open source phone. Smartphones have become a commodity. Yet the solidarity among fabricators against a { us: hardware,

This is a good thing if you want a truly open source phone. Smartphones have become a commodity. Yet the solidarity among fabricators against a { us: hardware, you: software } business model has been remarkable. Margins have been razor thin for awhile, the business is incredibly cutthroat. Though it might come from Taiwan, I hope this is the straw that breaks the camels back. BTW I'm talking on the low end here. It's already being done on the high end by Fairphone, and a few others.

reaperducer 8y ago
"Razor thin" may be something of an exaggeration. Apple's margin on iPhones is 59-64%[1]. Samsung is 17%[0]. "Razor thin" would be the grocery industry, which is usually under 3%. [0]: http://fortune.com/2016/08/23/apple-samsung-smartphone-profits/ http://fortune.com/2016/08/23/apple-samsung-smartphone-profi... [1]: https://www.reuters.com/article/us-apple-iphone/apples-iphone-x-has-higher-margin-than-iphone-8-analysis-idUSKBN1D62RZ https://www.reuters.com/article/us-apple-iphone/apples-iphon...
- lotsofpulp 8y ago
  Product with more volume (especially routine like groceries) usually have less margin due to lower risk than those with low volume and higher risk (of not selling in the necessary time period).
- grizzles 8y ago
  Exactly my point. This market has winner take all type dynamics. Consider the textiles industry. There are brands selling expensive t-shirts for nice profit margins. And there are a ton of t-shirt exporters that can probably barely string a few dimes together. It's exactly the same in the smartphone market. There are ~50+ Chinese smartphone manufacturers that are barely profitable. They wholesale $20-$40 phones in the Indian market to stay afloat.
- bitmapbrother 8y ago
  Your second link is broken. Your first link, from 2016, indicates that Apple made a 38% margin. >Apple's margin on iPhones is 59-64%. Samsung is 17% Apple does not make 59-64% margin on their phones. This highly inaccurate figure was likely extrapolated by taking the retail price of the phone and subtracting the cost of its parts. The real profit margin which is likely around 30-40%. As for Samsung, their flag ship phones also generate a profit margin that is similar to that of Apple's.
  - IkmoIkmo 8y ago
    Indeed, and Apple's EBIT margin is around 30%. It's an important figure because unlike say an LG, I don't think you can really see Apple phones separate from the rest of the company. Would we buy as many phones at these prices if we didn't have the App Store, OS X Macs, iCloud, Apple Music, Beats, Watches, Tablets, etc etc, in short, the ecosystem. All of that needs a company with massive overhead to work.

reaperducer 8y ago

"Razor thin" may be something of an exaggeration. Apple's margin on iPhones is 59-64%[1]. Samsung is 17%[0]. "Razor thin" would be the grocery industry, which is usually under 3%. [0]: http://fortune.com/2016/08/23/apple-samsung-smartphone-profits/ http://fortune.com/2016/08/23/apple-samsung-smartphone-profi... [1]: https://www.reuters.com/article/us-apple-iphone/apples-iphone-x-has-higher-margin-than-iphone-8-analysis-idUSKBN1D62RZ https://www.reuters.com/article/us-apple-iphone/apples-iphon...

lotsofpulp 8y ago
Product with more volume (especially routine like groceries) usually have less margin due to lower risk than those with low volume and higher risk (of not selling in the necessary time period).
grizzles 8y ago
Exactly my point. This market has winner take all type dynamics. Consider the textiles industry. There are brands selling expensive t-shirts for nice profit margins. And there are a ton of t-shirt exporters that can probably barely string a few dimes together. It's exactly the same in the smartphone market. There are ~50+ Chinese smartphone manufacturers that are barely profitable. They wholesale $20-$40 phones in the Indian market to stay afloat.
bitmapbrother 8y ago
Your second link is broken. Your first link, from 2016, indicates that Apple made a 38% margin. >Apple's margin on iPhones is 59-64%. Samsung is 17% Apple does not make 59-64% margin on their phones. This highly inaccurate figure was likely extrapolated by taking the retail price of the phone and subtracting the cost of its parts. The real profit margin which is likely around 30-40%. As for Samsung, their flag ship phones also generate a profit margin that is similar to that of Apple's.
- IkmoIkmo 8y ago
  Indeed, and Apple's EBIT margin is around 30%. It's an important figure because unlike say an LG, I don't think you can really see Apple phones separate from the rest of the company. Would we buy as many phones at these prices if we didn't have the App Store, OS X Macs, iCloud, Apple Music, Beats, Watches, Tablets, etc etc, in short, the ecosystem. All of that needs a company with massive overhead to work.