6 ms·

Here's a similar article without the paywall I ran into at WSJ: http://www.businessinsider.com/apple-92-percent-profits-entire-smartphone-industry-q1-samsung-20

by olympus 11y ago

Here's a similar article without the paywall I ran into at WSJ: http://www.businessinsider.com/apple-92-percent-profits-entire-smartphone-industry-q1-samsung-2015-7 http://www.businessinsider.com/apple-92-percent-profits-enti... I noted that Apple is responsible for less than 20% of the industry in terms of units sold last quarter, but makes over 90% of the profit. Considering the prices of a Galaxy S6 and iPhone 6 aren't that different, there is something way different between the operations at Apple and the competition (read: Samsung). The difference is in profit margin, but it's not obvious where (at least to me). Samsung should have great deals with it's affiliates of the same name on chip and screen prices, and it can't be that it's factory conditions are much better than Apple's.

soylentcola 11y ago
I'm curious as to whether the figures for percentage of profits in the "smartphone industry" include only hardware (where most of the other OEMs make their money) or the whole mobile division (iOS devices + App Store revenue, etc)
seanmcdirmid 11y ago
Tim Cook got where he is through optimizing logistics, manufacturing, everything. They are just very disciplined and efficient when it comes to cranking out devices, while their software R&D is still quite reasonable. Samsung is one of those old-fashioned conglomerates that tries to do too many things in house (they even out source for Apple!), but I bet they lose efficiency because of that.
mmorris 11y ago
I believe the big difference is that Apple sells mostly their top model, whereas a lot of Samsung's business is in the lower tier/cheaper phones. Of course, those lower end phones have much lower profit margins. Not the most objective source I realize, but here's some relevant info [0]: Samsung said its phone shipments were "driven by mid to low-end products," adding that its Note 4 release only contributed a "marginal increase" due to being released at the very end of the quarter. [0]:http://appleinsider.com/articles/15/01/28/samsungs-mobile-profits-plunge-642-after-apples-iphone-6-devastates-premium-galaxy-sales http://appleinsider.com/articles/15/01/28/samsungs-mobile-pr...
spacemanmatt 11y ago
Does Apple have to pay a ridiculous patent tax to Microsoft for use of an OS it developed?
- iMark 11y ago
  No, but neither does Samsung. Apple does have to pay for R&D for its own operating systems though.
  - robmcm 11y ago
    I thought Samsung signed a deal with MS to licence the patents infringed by Android. Something in the region of $10 per handset. Source: http://www.pcworld.com/article/240738/microsoft_signs_android_licensing_deal_with_samsung.html http://www.pcworld.com/article/240738/microsoft_signs_androi...
astrodust 11y ago
The #1 problem here is that Samsung largely tried to be the "like the iPhone but cheaper" player in the market. While that worked out fantastically well in the early days, it came to bite them pretty hard when even cheaper competitors rolled in. If your claim to fame is you're the cheapest, you're going to be racing to the bottom. Look at how dismal the state of Acer is in the PC world. What they should have done is differentiated themselves on something other than price. It will be hugely ironic if Blackberry manages to produce an Android phone more successful than Samsung's entries because they stubbornly stuck to their core design principles. People buy Blackberry not for price but because it's a Blackberry. They love the things.

by olympus 11y ago

soylentcola 11y ago

I'm curious as to whether the figures for percentage of profits in the "smartphone industry" include only hardware (where most of the other OEMs make their money) or the whole mobile division (iOS devices + App Store revenue, etc)

seanmcdirmid 11y ago

Tim Cook got where he is through optimizing logistics, manufacturing, everything. They are just very disciplined and efficient when it comes to cranking out devices, while their software R&D is still quite reasonable. Samsung is one of those old-fashioned conglomerates that tries to do too many things in house (they even out source for Apple!), but I bet they lose efficiency because of that.

mmorris 11y ago

I believe the big difference is that Apple sells mostly their top model, whereas a lot of Samsung's business is in the lower tier/cheaper phones. Of course, those lower end phones have much lower profit margins. Not the most objective source I realize, but here's some relevant info [0]: Samsung said its phone shipments were "driven by mid to low-end products," adding that its Note 4 release only contributed a "marginal increase" due to being released at the very end of the quarter. [0]:http://appleinsider.com/articles/15/01/28/samsungs-mobile-profits-plunge-642-after-apples-iphone-6-devastates-premium-galaxy-sales http://appleinsider.com/articles/15/01/28/samsungs-mobile-pr...

spacemanmatt 11y ago

Does Apple have to pay a ridiculous patent tax to Microsoft for use of an OS it developed?

iMark 11y ago
No, but neither does Samsung. Apple does have to pay for R&D for its own operating systems though.
- robmcm 11y ago
  I thought Samsung signed a deal with MS to licence the patents infringed by Android. Something in the region of $10 per handset. Source: http://www.pcworld.com/article/240738/microsoft_signs_android_licensing_deal_with_samsung.html http://www.pcworld.com/article/240738/microsoft_signs_androi...

astrodust 11y ago

The #1 problem here is that Samsung largely tried to be the "like the iPhone but cheaper" player in the market. While that worked out fantastically well in the early days, it came to bite them pretty hard when even cheaper competitors rolled in. If your claim to fame is you're the cheapest, you're going to be racing to the bottom. Look at how dismal the state of Acer is in the PC world. What they should have done is differentiated themselves on something other than price. It will be hugely ironic if Blackberry manages to produce an Android phone more successful than Samsung's entries because they stubbornly stuck to their core design principles. People buy Blackberry not for price but because it's a Blackberry. They love the things.