Apple's cellular sector rivals jealous of iPhone profits

Within the mobile industry jungle, Apple is the mouse frightening the elephant. The iPhone is causing all the fear. Even though Apple claims a tiny sliver of the market, it collects the fattest portion of cellular industry profits. Even last summer’s “Antennagate” scandal couldn’t derail the iPhone’s runaway achievement. Experts are saying Apple’s control of the mobile industry makes it unlikely that Android, which depends on devices that compete on price, could ever pose a threat.

Apple transforms innovations into cash

Apple’s domination of the mobile industry was reported on Sept. 21 by Fortune on CNN.com. Fund market analyst Canaccord Genuity gave Apple stock a “buy” rating and price target of $ 356 per share. The analyst’s recommendations incorporated data showing how Apple is turning its innovations into cash. From January to June this year, Apple sold 17 million iPhones. That total represents a market share of just 3 percent. Samsung, Nokia and LG–the world’s three largest handset makers–sold 400 million units combined. Apple racked up the numbers where they counted. The company amassed 39 percent of market earnings in that time frame. The top three heavyweights fought over 32 percent of mobile industry profits. The significance of Apple’s performance was put in context by Canaccord Genuity. As a rule, cell phone manufacturers are lucky for making 10 percent operating margins, or any profit at all. It’s estimated that Apple make! s about 50 percent gross margin and more than 30 percent operating margin for its iPhone.

Beneath the surface of Apple’s accomplishment

Until the iPhone was created, making nearly 40 percent of market profits with a mere 3 percent a share of the market was unthinkable. Distinctive advertising aside, there are essential reasons why Apple has managed to run circles around the mobile market, said Jason Mick at Daily Tech. A large factor is the carrier iPhone owners love to hate. Apple has wrought an exceedingly rich contract from AT and T, who’s using the iPhone to gain customers. Apple also uses cheaper hardware than top-of-the-line Android competitors. Additionally, Apple leverages the iPhones extreme popularity to coax a higher volume at lower prices from its OEMs. Apple’s battle plan has resulted in piles of money to spend on invention within the iPhone/Android war. Beating Android, Mick said, probably isn’t at the top of Apple’s list. Continuing to impress loyal iPhone users is enough to keep Apple where it wants to be.

It is difficult to tarnish Apple’s brand

Even a so-called public relations ordeal such as Antennagate could not disrupt the iPhone’s energy. The media’s flogging of “Death Grip” reception interference failed to choke off sales of the iPhone 4G. Antennagate reached its peak in July. After Consumer Reports said it would not recommend the iPhone, experts predicted a disaster that never came. Consumer Reports is sticking to its guns. Apple could care less as the iPhone, as reported by Computerworld, finished first in J.D. Power and Associates’ smartphone consumer satisfaction survey for the fourth year in a row.

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