iPhone: 3% of world market, 39% of world market profits

Posted on by Mike Evans

Despite being one of the smaller phone manufacturers in the world (which you wouldn't think, judging by how many fists you see holding iPhones), Apple accounts for a whopping 39 percent of industry profits. Some manufacturers, it seems, count themselves lucky to make 10% on phone sales while many have to be content with breaking even. In the first six months of 2010 Apple moved 17 million handsets compared with 590 million sold by the rest of the industry - 400 by the big three, Nokia, LG and Samsung, and 190 by the remainder. That's under 3 percent of market share and yet profits represent a 39 percent share of the total industry. Apple must be doing something right.  

Despite ever increasing numbers of iPhones being sold, there is no lack of demand for the brand even on the second-hand market. Only yesterday I was in a second-hand phone store in London's Tottenham Court Road where old iPhones were being snapped up at ridiculously high prices. They had only two 16GB 3GS models in stock, both in questionable condition, at prices of £260 and £315. The more expensive one had a box and fewer scratches, but both were still locked to one mobile phone company. These prices are all the more inexplicable when you realise you can have a brand new 3GS (albeit only 8GB) for £419 or, better still, a 16GB iPhone 4 for a bargain £499. 

The strength of the second-hand market for iPhones (and, incidentally, for iPod touch models) is a testimony to the Apple brand and the sheer desirability of the iOS4 devices. It is also a reflection of Apple's unrivalled reputation for quality and after-sales service. Only this week the American Customer Satisfaction Index gave Apple an 86 out of 100 score across their product range (including Macs, of course). This is up two points from last year and, according to reports, has been fuelled largely by customer satisfaction with the iPad which, apparently, is drawing the highest figures ever seen. Other manufacturers are left trailing.

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