Moooove Apple...Huawei is on the Way! Huawei is Now NO.2 After Samsung

Funny how things change. We once had Nokia and Blackberry on the top and now we have had Samsung and Apple battle for the positions 1 and 2 for a couple of years now. But Someone was catching up on the tide and now Huawei has toppled Apple off the number 2 spot.

Even though Apple enjoys the high pricing model over what I may call mid and low range segment of what Samsung and Huawei are ripping the bulk of their profits from, it is important to consider that numbers do not lie. Over the years, Samsung and Huawei have been pushing more phones to the market and Apple’s number seems to have reached a point of saturation.

Don’t forget OPPO is sniffing on Apple’s ass now.

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That’s data by just one research firm, Counterpoint. And it refers to sales of two months. June and July, and this tells you that it’s usually the lowest point for iPhone sales as consumers wait for the next iPhone. Not really something we can count on as a position on things.

At the moment it’s not so useful at this point, but 2 or 3 years back, that is the way it started with Samsung and Apple and before we know it, Samsung managed to lock that position.

Apple should really be scared. The company is not innovating anymore when it comes to the iPhone. The good thing about them is that they exhaust everything first before trying something new. If they had a chance to get hold of Samsung’s current hardware, they’d do wonders.

We’ve said this for many years, but they always come out swinging, even with slight changes between the versions. You can never underestimate that walled garden. And the support they give consumers to stay loyal. Three year old hardware getting the most recent OS version is standard for iPhones. We can’t say the same for Android, outside pixel and Nexus.

Now that said, Apple also makes massive profits from those numbers less than Samsung. In fact they make more profits than the top 5 combined. Think about that.

Yeah. They are definitely not worried.

In 2015, Apple grabbed a 94% share of the world’s global smartphone profits.

In Q3 2016, Apple grabbed 104% of the smartphone industry profit. (Note 7 blunder)

Remember that iOS has no competitor in its own tuff. So this is expected to change in the next few years. Even at one point, Steve Jobs though of allowing Sony to install Apple’s OS on the VAIOs.

On average its 90% YoY. That chunk is huge but when your numbers stagnate and you start to make up for the difference with high prices, the price too will reach saturation.

Keep in mind that the iPhones cost less than any other high end smartphone to manufacture. So their profits margins are high based on the fact that brand loyalism is ripping big for them.

It will be interesting to know how this works out after the 10th anniversary model is released.

Not for long… Samsung has raised their display component part prices - $130 per unit so no more $50 screens for iPhone

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I never like to say never, but that’s probably never going to happen. What incentive is there for them in making iOS open source when they have the most profitable ecosystem precisely because they’re able to so closely control their walled garden?

hehehe I wonder that Apple is going to charge for this when they used to charge over $200 for difference in memory for a component that cost $25. That means even screen repairs are going to hurt iPhone owners.

Funny thing though, for the first time Samsung has managed to surpass Apple revenues in the smartphone business. Not sure, which quarter it is but it is this year.

One of the main reasons why Apple is so difficult to dethrone is their software. They cannot open source that because it would certainly be the end of their massive profits. If they did that, they would lose a substantial part of the crazy huge markup they operate on. Currently to make an iPhone costs approximately 300 bucks and they sell it for 1,000. That is because they’re not only selling users the phone but also unparalleled support, proven stability across all devices, and access to their numerous services. The cost of running these addon services doesn’t even factor into reducing handset sales revenue because they pay for themselves (case-in-point: iTunes). About 40% of the cost of an iPhone is pure profit.

Now, if they open source their software, they’ll lose control of the markup they add because they will only benefit from royalties which couldn’t come close to the profits they make now. They’ll also be introducing fragmentation which is a major problem for Android. In the Android ecosystem, phone companies are essentially cannibals because if one rises, it does so at the expense of another. That is why you see major headlines that Samsung is now on top, or Huawei is taking the world by storm, or Xiaomi will conquer all if it comes out of China.

The simple fact is that there are two ponds; Android, and Apple. Apple can do whatever it wants because the battles happening in the other pond barely affect it.

Remember Google bought Motorola and shortly sold it to Lenovo? It’s because they saw how cutthroat the competition is and how difficult it is to stay afloat as a struggling handset manufacturer. Companies like Sammy, Xiaomi, and Huawei have some wiggle room because of their already big market shares and massive budgets. Samsung only recently started to leverage that by producing ‘premium’ phones and selling them just as expensive as the iPhone. Tell a small company to do that and they won’t stay afloat even for a year.

Finally, let’s face it. Apple enjoys cult-like following in the U.S and other high income countries.

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This is absolutely true. However, how about a deal that would see only few players being allowed to use iOS? I mean Apple has been found guilty on several occasions on trying to influence the pricing of their products in various markets.

In this case, Apple can chose Samsung, if they predominantly use Samsung hardware, it shall be very easy for them to figure out a way of having iOS to work on Samsungs. They can limit this to let’s say the S-Series and Note line. They can influence the price if they want to. I mean, the Batman or what edition of the S-line have been selling for an arm and a leg.

Imagine how may Samsung fanboys that are willing to use the iPhone but find the Samsungs much sturdier? These are the people who won’t care about the price and opt for the Samsung with iOS.

Imagine a scenario where, Apple decides to include an iPhone version of Android? Apple fandroids would go for these.

What Apple should do is use a controlled ecosystem just the way Steve Jobs thought of the Sony Vaios. To him, the Vaios were of high quality and capable of running OS X.

However, the problem is equally, what you have mentioned; Royalties.

@deewinc please note that Apple is a software company and not a hardware company. Their product is iOS. So this means that you can forget about an iPhone running Android and forget about any other device running iOS.

Apple is innovating, They just smart about it. They do extensive market research before jumping ship.

In Q1 2017, Samsung overtook Apple in Sales not revenue.