The competition is making FAR less profit per smartphone sold than Apple, largely because of the volume per model sold, and also because of vertical integration

The competition is making FAR less profit per smartphone sold than Apple, largely because of the volume per model sold, and also because of vertical integration. In fact, outside of Samsung, most competitors are probably losing money. Apple only sells one model of iPhone per year, in about 10 very similar configurations, which gives them huge economies in assembly and strong negotiating power on components (they're buying 100 million of a certain type of display, instead of 5 million of 10 different kinds of displays). Furthermore, the supply chain economics are much better, with lower inventory costs (if you are trying to keep 10 items in stock with variable demand, you'll need to have more inventory on hand than if you have only one item). The second big profit driver for Apple is vertical integration -- they sell a good chunk of iPhones, especially in the US, themselves, whether online or at Apple Stores. This means they get to keep the entire profit instead of handing over some of it to a retailer.