Within the cellular sector jungle, Apple is the mouse frightening the elephant. The iPhone is causing all the fear. Apple earns the largest portion of cellular sector earnings by a huge margin, even though it has got the smallest a share of the market. Even “Antennagate,” which could have killed many handsets, couldn’t stop Apple from setting sales records with the iPhone 4. Analysts are saying Apple’s domination of the mobile industry makes it unlikely that Android, which depends on devices that compete on price, could ever pose a threat.
Apple has got the golden touch
Apple’s domination of the mobile industry was reported on September 21 by Fortune on CNN.com. Giving its stock a “buy” rating, the fund market analyst Canaccord Genuity projected out Apple stock as high as $ 356 per share. The analyst’s recommendations integrated data showing how Apple is turning its inventions into money. The business sold 17 million iPhones in the first half of 2010–a 3 percent market share. Samsung, Nokia and LG–the world’s three largest handset makers–sold 400 million units combined. Apple, however, won the game by collecting 39 percent of total market profits. Samsung, Nokia and LG shared 32 percent of industry profits. Canaccord Genuity pointed out that most handset businesses struggle to make a profit or even 10 percent operating margins. On the other hand, Apple is thought for making a gross margin of 50 percent on the iPhone, with an operating margin of 30 percent.
iPhone accomplishment a lot more than promoting
Producing 3 percent of an industry’s products for making almost 40 percent of the industry’s profit was unheard of until Apple came along with the iPhone. Apple has far outgained its rivals with more than slick marketing campaigns, according to Jason Mick at Daily Tech. Mick writes that as the iPhone is so popular, AT and T has given Apple an extremely lucrative contract to grow its subscriber base. Apple also leverages the operating system to gain cost efficiencies from a lesser grade of hardware. Additionally, Apple leverages the iPhones extreme recognition to coax a higher volume at lower prices from its OEMs. This business model has been so successful, cash is no object when it comes to developing technology that stays a step ahead of Android. But Mick said, why bother?. Catering to a loyal core of iPhone enthusiasts has gotten Apple this far.
Even Consumer Reports cannot derail the iPhone
Apple has been able to maintain a high level of customer satisfaction despite Antennagate. The media’s flogging of “Death Grip” reception interference failed to choke off sales of the iPhone 4G. Consumer Reports started the Antennagate furor in July when it said it would not recommend the iPhone. It nevertheless won’t. However the iPhone marches on. According to Computerworld, the J.D. Power and Associates consumer satisfaction rankings for smartphones lists the iPhone at the top of the list—its fourth consecutive first place finish.
Additional reading
CNN
CNN.com
Daily Tech
dailytech.com
Computerworld
computerworld.com
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