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> Apple buys a far larger share of smartphone and computer semiconductors, given that it accounts for half of global smartphones sales and earns 85% of all smar

> Apple buys a far larger share of smartphone and computer semiconductors, given that it accounts for half of global smartphones sales and earns 85% of all smartphones I feel like I'm getting trolled by the author who is citing sales and profits instead of units produced as a metric.

p1necone 2y ago
I imagine sales numbers and profits are publicly available information, whereas actual # of units produced is likely not an easy number to find?
- BenFranklin100 2y ago
  Given Android has 71% of the worldwide market share it’s difficult to make the argument Apple holds a monopoly on the smartphone market [1]. Even in the US, until about 2020, Android had a higher subscriber base, and there is no reason the situation could not reverse and iOS drop below its July 2023 53% subscriber market share [2]. Moreover, give iPhones are significantly more expensive than comparable Android phones, Apple’s ability to claw market share back from Android phones over the last decade is the opposite of how a monopolist might operate by flooding a market with cheap alternatives. It speaks to a consumer perception that iPhones have a larger value. [1] https://gs.statcounter.com/os-market-share/mobile/worldwide https://gs.statcounter.com/os-market-share/mobile/worldwide [2] https://www.statista.com/statistics/266572/market-share-held-by-smartphone-platforms-in-the-united-states/ https://www.statista.com/statistics/266572/market-share-held...
  - BenFranklin100 2y ago
    As a tagalong to my comment, I really wish Android phone makers would get their act together and give Apple better competition. If the trends of the last ten years hold up, iPhones might actually become a monopoly product at some point. ;)
    - wrsh07 2y ago
      Can I encourage you to start the android company you want to see? I'm confident you can get funding
      - paulmd 2y ago
        I think that’s part of the problem - android doesn’t work as a product model, for literally anyone involved. Google would not be doing it if it wasn’t for the advertising business. It’s pretty much the definition of a loss-leader to get people into the ecosystem for things that google can monetize. So android as a product is implicitly, foreverially tiedup with marketing and spyware, because google isn’t onboard otherwise. Same as gmail or search was a loss-leader to get people onboard for advertising too. Google only cares about these things insofar as they might stop being a funnel into their money-makers. SOC vendors can’t make a run providing 7 years of driver/firmware support for a product they sell once at bleedingly thin margins. Or at least, they really don’t wanna. OEMs can’t make a run providing 7 years of support for someone else’s software, especially when they also have to do a lot of the driver work themselves thanks to IHVs abdicating their job. Consumers get stuck with a product that loses support in 2 years or whatever, and may even have landmines involved with unlocking it to continue support (Sony wipes the camera firmware if you unlock the bootloader for example). They face a completely unnecessary hardware and software treadmill due to all these other factors. Supporting your own phone is not a reasonable expectations for Joe Sixpack either. The idea is supposed to be the “linux model” but honestly linux has the same problems, it is reliant on the same unpaid labor around driver work to make up for the inability of vendors to track the ecosystem and provide the long-tail of support. In cases where the vendor can’t open source it, the functionality simply ends up broken, and driver support, kernel versioning, and DKMS is a constant battle for end users. Just like with custom roms for android. Android simply has too little margin split among too many disinterested parties to ever really work. And fixing it would involve either increasing the size of the pie (margin), which consumers in this segment hate to an unfathomable degree (android users = cheapskates is a reliable first-order approximation, borne out by the app store revenue too). But that's the free-market system working as intended, right? Literally every penny has been squeezed out of margins, software costs pushed onto free labor in the open-source community, and ad revenue used to contra-fund and push end-user prices even lower. Android is the finest solution the free-market can deliver, that's how the system is supposed to work, and it’s delivered an excellent product for the needs of the customer - it's just you're not the customer, you're the product. The alternative is vertical consolidation and bringing more things under the same roof, raising the price, and targeting the consumer needs instead of the ad revenue needs. Basically the apple model. But that can never be a viable path in a GPL world. And it will still probably involve paying more - phone costs are currently subsidized by all these indirect costs like ad money and vendors cutting corners on support. There is more work that will need to be done, and that contra-revenue from advertising revenue needs to be backed out of the purchase price, so at the end of the day consumers will simply have to pay somewhat more (hopefully not apple prices of course). But again, people are cheapskates, android users doubly so. I don't know why people got so allergic to the idea of paying for their operating system, the baseline assumption now seems to be that it needs to be free, and if that's the case you will never be free, only stuck in a choice between advertising-mongers and exploiting unpaid labor. And that can either be in hardware costs, or in actual recurring support costs, but either way, someone needs to be paid to sit down and make sure the bluetooth and sound drivers work. You see the same problem in software too - open-source projects get commercial entities tapping their value without providing contributions back, or existing via patronage to the needs and goals of the commercial entity. Without an incentive by the actual developers to provide end-user value, and with permissive licensing, you end up with a constant struggle for financial homeostasis. Firefox/Mozilla, for example. People complain about android but they still are not willing to pay a little more to opt-out of these problems. The revealed preference is for purchase price above all else, and people still think in the yardstick of Apple being "too expensive" rather than Android being "too cheap". The yardstick is still the artificially-cheap advertising-subsidized Android product. These are fundamentally problems of not enough margins to support all the players in this ecosystem, which leads to them looking for places to find the revenue to make it work. Pay a little more and these problems go away. If you want to stop being the product, get used to opening up your wallet. That transactionality is a good thing - you can’t really demand boundaries when you’re living on someone else’s dime. It’s Google’s house and they’re letting you crash for free. But this is the very deepest core of the problem - people will do anything except just pay a little more. You will never stop being the product if you can’t bring yourself to be a customer. (Yes, I pay for kagi, how did you know!?)
  - acdha 2y ago
    > iPhones are significantly more expensive than comparable Android phones This misperception is key to understanding the market, which is really two markets: Android has cheaper phones and dominates there but in the mid to high-end market the situation is reversed because the equivalent Android devices aren’t cheaper and because Qualcomm/Samsung lagged so far behind on CPU performance you’re getting something which performs like 1-2 iPhone generations back in most apps. Breaking out of that dynamic is hard because the Android manufacturers have to share more of their hardware revenue with less service revenue to compensate, so they don’t really have much room to lower prices since they’re already underperforming at the same price points. What could change a lot would be regulators forcing App Store competition or limiting revenue sharing across units. Apple and Google both benefit from that at the expense of the pure hardware vendors, but I’m not sure how effective e.g. the EU App Store regulations will prove in practice.
    - BenFranklin100 2y ago
      It sounds to me like you’re saying that Apple management recognized that an integrated ecosystem (phone, tablet, watch, desktop OS etc…) could offer significant value to its costumers (in Apple’s case, the customer is the end user) while providing sufficient margin to serve as a profitable business model. Google, an advertising company, was focused on giving away free stuff (Gmail, Android, etc…) as an means to build profiles of its users that it could sell to its customers (in this case, advertisers). A bit off topic, but I personally find Google, and by extension, the Android ecosystem, to be an underhanded business model. I don’t feel bad it’s ending poorly for them. It’s especially rich Google ripped off Apple in order to get Android launched [1]. [1] https://www.mactrast.com/2013/12/inside-story-android-ripped-original-iphone/ https://www.mactrast.com/2013/12/inside-story-android-ripped...
      - tsunamifury 2y ago
        This is such a ridiculous take and a ridiculous cited source. Apple makes 25% of its profit from laundered ad money. Like you need to stop trying to understand a sophisticated duopoly ecosystem from a fanboy blog.
      - 2y ago
  - dickersnoodle 2y ago
    >Given Android has 71% of the worldwide market share it’s difficult to make the argument Apple holds a monopoly on the smartphone market That won't stop a hefty share of HN posters from repeating that same whinge.
- gruez 2y ago
  >whereas actual # of units produced is likely not an easy number to find? "Global Smartphone Shipments (Millions)" https://www.counterpointresearch.com/insights/global-smartphone-share/ https://www.counterpointresearch.com/insights/global-smartph...
pie420 2y ago
units sold dont matter when the competition is selling $100 smartphones at a loss. The fact that one company is making 85% of the profits in an entire industry as massive as SMARTPHONES should be terrifying, but i guess we don't care about monopolism for some reason
- throwaway290 2y ago
  > when the competition is selling $100 smartphones at a loss That is actually terrifying, because logic dictates they make up profit in other ways. I can imagine how an ad company or nation state can go about it.
- SllX 2y ago
  Monopolies are measured according to market share, not profit share.
- chasil 2y ago
  I would like nothing better than watching the FTC take a scalpel to Apple. The vivisection of the PC division, the semiconductors, iOS, iPhone, and iPad into separate companies would be deeply satisfying. Shareholders might actually applaud the results in the end.
- icehawk 2y ago
  Do smartphones that get sold at $100 not have chips in them? Because the article is talking about semiconductor manufacturing, and the total numbers of semiconductors purchased. Profits and monopolies are a different article.
- yowzadave 2y ago
  Apple really is an unusual phenomenon--in most other industries, the bulk of the profit is made on mass-market products, while high-end products are able to cater to a niche that is willing to spend much more. In smartphones, however, the highest-end product you can buy is actually quasi-mass-market--there is no Ferrari or Rolex of smartphones, an iPhone is legitimately the best product you can get, and it's within reach of a substantial portion of the buyer's market. Not sure if this is good or bad, but it's certainly unusual, and it's part of the reason that this "monopoly" question is sometimes confusing--Apple makes by far the most profit despite also selling the highest-end product, and their unit sales, despite being somewhat less than Android, are still in the same ballpark.
alephnerd 2y ago
> I feel like I'm getting trolled by the author Because it's Matt Stoller. I've commented (with citations) enough on HN about Stoller's biases and issues around analysis [0][1] He's upped his content publishing the past few months now that he is competing with Oren Cass to change mindshare and build a prominent profile, but Cass is a Romney protege so he's limited. If Trump becomes president, Stoller is most likely going to be nominated as an FTC commissioner because of his close relationship to JD Vance [2] [0] - https://news.ycombinator.com/item?id=40624532 https://news.ycombinator.com/item?id=40624532 [1] - https://news.ycombinator.com/item?id=38147499 https://news.ycombinator.com/item?id=38147499 [2] - https://nationalpost.com/opinion/matt-stoller-whos-afraid-of-j-d-vance-wall-street-and-big-tech-are-with-good-reason https://nationalpost.com/opinion/matt-stoller-whos-afraid-of...
- deleted 2y ago
  [deleted]
- pessimizer 2y ago
  Let me get this straight: the "close relationship to JD Vance" is that he wrote an article that mentioned that Vance said something nice about Lina Khan, and this article means that Trump will "most likely" fire Lina Khan and hire Matt Stoller?
  - alephnerd 2y ago
    That article is one of the several engagements he's been putting on recently in the right-sphere. His most damning quote was from 2023 that “fundamentally, my view is that authoritarianism is coming from the private sector,” not from those who’d attempt to seize control of democratic institutions by force. [0] > Trump will "most likely" fire Lina Khan and hire Matt Stoller He doesn't need to fire Lina Khan (though he most likely would) because Melissa Holyoak's term is expiring in 2025 [0] - https://www.politico.com/news/magazine/2023/04/21/matt-stoller-hawley-trust-busting-00092679 https://www.politico.com/news/magazine/2023/04/21/matt-stoll...
downWidOutaFite 2y ago
You don't think that's a pretty good proxy for units? Especially leading edge parts.
- rowanG077 2y ago
  It really isn't. Apple pays insanely well to exclusively use TSMC top tier node. I would not be surprised if the SoC in an iphone costs Apple 10 times as much as the average android phone SoC.
  - Kirby64 2y ago
    The “average” SoC or the high end ones in flagships? Don’t be surprised at how much Qualcomm charges for their flagship stuff. Even if Qualcomm is a node behind, they also need their “margin” for making the thing. Apple pays a big design team, but they don’t pay the additional margin on the SoC… just whatever TSMC charges. Remember, Qualcomm has to pay TSMC too.
    - rowanG077 2y ago
      The average. We are talking about the entire smartphone market here. It makes no sense to compare only the most expensive android chips.
- gruez 2y ago
  But the 85% figure is almost certainly profit, not revenue. In that case using that as a proxy for units sold is so absurd that it's bordering on bad faith argumentation.
- asdasdsddd 2y ago
  So because Apple makes higher profit, they purchase a higher proportion of the highest quality parts. And the fact that they choose to purchase from Asia is bad because we want domestic production? I guess I can buy it, but I feel like this is more of a failure of American fabs more than anything.

p1necone 2y ago

I imagine sales numbers and profits are publicly available information, whereas actual # of units produced is likely not an easy number to find?

BenFranklin100 2y ago
Given Android has 71% of the worldwide market share it’s difficult to make the argument Apple holds a monopoly on the smartphone market [1]. Even in the US, until about 2020, Android had a higher subscriber base, and there is no reason the situation could not reverse and iOS drop below its July 2023 53% subscriber market share [2]. Moreover, give iPhones are significantly more expensive than comparable Android phones, Apple’s ability to claw market share back from Android phones over the last decade is the opposite of how a monopolist might operate by flooding a market with cheap alternatives. It speaks to a consumer perception that iPhones have a larger value. [1] https://gs.statcounter.com/os-market-share/mobile/worldwide https://gs.statcounter.com/os-market-share/mobile/worldwide [2] https://www.statista.com/statistics/266572/market-share-held-by-smartphone-platforms-in-the-united-states/ https://www.statista.com/statistics/266572/market-share-held...
- BenFranklin100 2y ago
  As a tagalong to my comment, I really wish Android phone makers would get their act together and give Apple better competition. If the trends of the last ten years hold up, iPhones might actually become a monopoly product at some point. ;)
  - wrsh07 2y ago
    Can I encourage you to start the android company you want to see? I'm confident you can get funding
    - paulmd 2y ago
      I think that’s part of the problem - android doesn’t work as a product model, for literally anyone involved. Google would not be doing it if it wasn’t for the advertising business. It’s pretty much the definition of a loss-leader to get people into the ecosystem for things that google can monetize. So android as a product is implicitly, foreverially tiedup with marketing and spyware, because google isn’t onboard otherwise. Same as gmail or search was a loss-leader to get people onboard for advertising too. Google only cares about these things insofar as they might stop being a funnel into their money-makers. SOC vendors can’t make a run providing 7 years of driver/firmware support for a product they sell once at bleedingly thin margins. Or at least, they really don’t wanna. OEMs can’t make a run providing 7 years of support for someone else’s software, especially when they also have to do a lot of the driver work themselves thanks to IHVs abdicating their job. Consumers get stuck with a product that loses support in 2 years or whatever, and may even have landmines involved with unlocking it to continue support (Sony wipes the camera firmware if you unlock the bootloader for example). They face a completely unnecessary hardware and software treadmill due to all these other factors. Supporting your own phone is not a reasonable expectations for Joe Sixpack either. The idea is supposed to be the “linux model” but honestly linux has the same problems, it is reliant on the same unpaid labor around driver work to make up for the inability of vendors to track the ecosystem and provide the long-tail of support. In cases where the vendor can’t open source it, the functionality simply ends up broken, and driver support, kernel versioning, and DKMS is a constant battle for end users. Just like with custom roms for android. Android simply has too little margin split among too many disinterested parties to ever really work. And fixing it would involve either increasing the size of the pie (margin), which consumers in this segment hate to an unfathomable degree (android users = cheapskates is a reliable first-order approximation, borne out by the app store revenue too). But that's the free-market system working as intended, right? Literally every penny has been squeezed out of margins, software costs pushed onto free labor in the open-source community, and ad revenue used to contra-fund and push end-user prices even lower. Android is the finest solution the free-market can deliver, that's how the system is supposed to work, and it’s delivered an excellent product for the needs of the customer - it's just you're not the customer, you're the product. The alternative is vertical consolidation and bringing more things under the same roof, raising the price, and targeting the consumer needs instead of the ad revenue needs. Basically the apple model. But that can never be a viable path in a GPL world. And it will still probably involve paying more - phone costs are currently subsidized by all these indirect costs like ad money and vendors cutting corners on support. There is more work that will need to be done, and that contra-revenue from advertising revenue needs to be backed out of the purchase price, so at the end of the day consumers will simply have to pay somewhat more (hopefully not apple prices of course). But again, people are cheapskates, android users doubly so. I don't know why people got so allergic to the idea of paying for their operating system, the baseline assumption now seems to be that it needs to be free, and if that's the case you will never be free, only stuck in a choice between advertising-mongers and exploiting unpaid labor. And that can either be in hardware costs, or in actual recurring support costs, but either way, someone needs to be paid to sit down and make sure the bluetooth and sound drivers work. You see the same problem in software too - open-source projects get commercial entities tapping their value without providing contributions back, or existing via patronage to the needs and goals of the commercial entity. Without an incentive by the actual developers to provide end-user value, and with permissive licensing, you end up with a constant struggle for financial homeostasis. Firefox/Mozilla, for example. People complain about android but they still are not willing to pay a little more to opt-out of these problems. The revealed preference is for purchase price above all else, and people still think in the yardstick of Apple being "too expensive" rather than Android being "too cheap". The yardstick is still the artificially-cheap advertising-subsidized Android product. These are fundamentally problems of not enough margins to support all the players in this ecosystem, which leads to them looking for places to find the revenue to make it work. Pay a little more and these problems go away. If you want to stop being the product, get used to opening up your wallet. That transactionality is a good thing - you can’t really demand boundaries when you’re living on someone else’s dime. It’s Google’s house and they’re letting you crash for free. But this is the very deepest core of the problem - people will do anything except just pay a little more. You will never stop being the product if you can’t bring yourself to be a customer. (Yes, I pay for kagi, how did you know!?)
- acdha 2y ago
  > iPhones are significantly more expensive than comparable Android phones This misperception is key to understanding the market, which is really two markets: Android has cheaper phones and dominates there but in the mid to high-end market the situation is reversed because the equivalent Android devices aren’t cheaper and because Qualcomm/Samsung lagged so far behind on CPU performance you’re getting something which performs like 1-2 iPhone generations back in most apps. Breaking out of that dynamic is hard because the Android manufacturers have to share more of their hardware revenue with less service revenue to compensate, so they don’t really have much room to lower prices since they’re already underperforming at the same price points. What could change a lot would be regulators forcing App Store competition or limiting revenue sharing across units. Apple and Google both benefit from that at the expense of the pure hardware vendors, but I’m not sure how effective e.g. the EU App Store regulations will prove in practice.
  - BenFranklin100 2y ago
    It sounds to me like you’re saying that Apple management recognized that an integrated ecosystem (phone, tablet, watch, desktop OS etc…) could offer significant value to its costumers (in Apple’s case, the customer is the end user) while providing sufficient margin to serve as a profitable business model. Google, an advertising company, was focused on giving away free stuff (Gmail, Android, etc…) as an means to build profiles of its users that it could sell to its customers (in this case, advertisers). A bit off topic, but I personally find Google, and by extension, the Android ecosystem, to be an underhanded business model. I don’t feel bad it’s ending poorly for them. It’s especially rich Google ripped off Apple in order to get Android launched [1]. [1] https://www.mactrast.com/2013/12/inside-story-android-ripped-original-iphone/ https://www.mactrast.com/2013/12/inside-story-android-ripped...
    - tsunamifury 2y ago
      This is such a ridiculous take and a ridiculous cited source. Apple makes 25% of its profit from laundered ad money. Like you need to stop trying to understand a sophisticated duopoly ecosystem from a fanboy blog.
    - 2y ago
- dickersnoodle 2y ago
  >Given Android has 71% of the worldwide market share it’s difficult to make the argument Apple holds a monopoly on the smartphone market That won't stop a hefty share of HN posters from repeating that same whinge.
gruez 2y ago
>whereas actual # of units produced is likely not an easy number to find? "Global Smartphone Shipments (Millions)" https://www.counterpointresearch.com/insights/global-smartphone-share/ https://www.counterpointresearch.com/insights/global-smartph...

pie420 2y ago

units sold dont matter when the competition is selling $100 smartphones at a loss. The fact that one company is making 85% of the profits in an entire industry as massive as SMARTPHONES should be terrifying, but i guess we don't care about monopolism for some reason

throwaway290 2y ago
> when the competition is selling $100 smartphones at a loss That is actually terrifying, because logic dictates they make up profit in other ways. I can imagine how an ad company or nation state can go about it.
SllX 2y ago
Monopolies are measured according to market share, not profit share.
chasil 2y ago
I would like nothing better than watching the FTC take a scalpel to Apple. The vivisection of the PC division, the semiconductors, iOS, iPhone, and iPad into separate companies would be deeply satisfying. Shareholders might actually applaud the results in the end.
icehawk 2y ago
Do smartphones that get sold at $100 not have chips in them? Because the article is talking about semiconductor manufacturing, and the total numbers of semiconductors purchased. Profits and monopolies are a different article.
yowzadave 2y ago
Apple really is an unusual phenomenon--in most other industries, the bulk of the profit is made on mass-market products, while high-end products are able to cater to a niche that is willing to spend much more. In smartphones, however, the highest-end product you can buy is actually quasi-mass-market--there is no Ferrari or Rolex of smartphones, an iPhone is legitimately the best product you can get, and it's within reach of a substantial portion of the buyer's market. Not sure if this is good or bad, but it's certainly unusual, and it's part of the reason that this "monopoly" question is sometimes confusing--Apple makes by far the most profit despite also selling the highest-end product, and their unit sales, despite being somewhat less than Android, are still in the same ballpark.

alephnerd 2y ago

> I feel like I'm getting trolled by the author Because it's Matt Stoller. I've commented (with citations) enough on HN about Stoller's biases and issues around analysis [0][1] He's upped his content publishing the past few months now that he is competing with Oren Cass to change mindshare and build a prominent profile, but Cass is a Romney protege so he's limited. If Trump becomes president, Stoller is most likely going to be nominated as an FTC commissioner because of his close relationship to JD Vance [2] [0] - https://news.ycombinator.com/item?id=40624532 https://news.ycombinator.com/item?id=40624532 [1] - https://news.ycombinator.com/item?id=38147499 https://news.ycombinator.com/item?id=38147499 [2] - https://nationalpost.com/opinion/matt-stoller-whos-afraid-of-j-d-vance-wall-street-and-big-tech-are-with-good-reason https://nationalpost.com/opinion/matt-stoller-whos-afraid-of...

deleted 2y ago
[deleted]
pessimizer 2y ago
Let me get this straight: the "close relationship to JD Vance" is that he wrote an article that mentioned that Vance said something nice about Lina Khan, and this article means that Trump will "most likely" fire Lina Khan and hire Matt Stoller?
- alephnerd 2y ago
  That article is one of the several engagements he's been putting on recently in the right-sphere. His most damning quote was from 2023 that “fundamentally, my view is that authoritarianism is coming from the private sector,” not from those who’d attempt to seize control of democratic institutions by force. [0] > Trump will "most likely" fire Lina Khan and hire Matt Stoller He doesn't need to fire Lina Khan (though he most likely would) because Melissa Holyoak's term is expiring in 2025 [0] - https://www.politico.com/news/magazine/2023/04/21/matt-stoller-hawley-trust-busting-00092679 https://www.politico.com/news/magazine/2023/04/21/matt-stoll...

downWidOutaFite 2y ago

You don't think that's a pretty good proxy for units? Especially leading edge parts.

rowanG077 2y ago
It really isn't. Apple pays insanely well to exclusively use TSMC top tier node. I would not be surprised if the SoC in an iphone costs Apple 10 times as much as the average android phone SoC.
- Kirby64 2y ago
  The “average” SoC or the high end ones in flagships? Don’t be surprised at how much Qualcomm charges for their flagship stuff. Even if Qualcomm is a node behind, they also need their “margin” for making the thing. Apple pays a big design team, but they don’t pay the additional margin on the SoC… just whatever TSMC charges. Remember, Qualcomm has to pay TSMC too.
  - rowanG077 2y ago
    The average. We are talking about the entire smartphone market here. It makes no sense to compare only the most expensive android chips.
gruez 2y ago
But the 85% figure is almost certainly profit, not revenue. In that case using that as a proxy for units sold is so absurd that it's bordering on bad faith argumentation.
asdasdsddd 2y ago
So because Apple makes higher profit, they purchase a higher proportion of the highest quality parts. And the fact that they choose to purchase from Asia is bad because we want domestic production? I guess I can buy it, but I feel like this is more of a failure of American fabs more than anything.