AAPL Stock Is Dominating the Smartphone Market
Apple Inc. (NASDAQ:AAPL) recorded over 100% of the smartphone market’s operating profits in the the third quarter, dominating its competitors, according to BMO Capital Markets.
BMO Capital Markets analyst Tim Long estimates that AAPL stock accounted for more than 100% of the smartphone market because other vendors lost money in the sector. As a result, Apple has more smartphone profit than the industry netted overall. This is an improvement over the 90% of smartphone profits that Apple Inc. registered last year, Long said in a research report last Thursday.
With Samsung Electronics Co Ltd coming in second place, netting only about 0.9% of the profit share, Apple stock is, at the moment, unrivaled for smartphone profit supremacy. (Source: “Apple iPhone Grabs 104% Of Smartphone Industry Profit In Q3,” Investors Business Daily, November 3, 2016.)
The smartphone wars quite literally heated up recently, with the Samsung “Galaxy Note 7” being recalled, due to several units spontaneously catching fire. Despite Samsung’s lead in market share, which BMO has at 21.7% of the smartphone market based on units sold in Q3, AAPL stock’s 13.2% is more than enough to keep its profits sky-high.
With AAPL stock asserting its profit dominance at over 100% of the market, this does not bode well for its competitors, especially when big brand names like HTC Corporation and LG Electronics Inc. were actually money-losers in the smartphone market last quarter.
One caveat is that, despite Apple stock’s strength in operating profits, the “iPhone” is not exactly selling like gangbusters globally. Hampered by Apple’s luxury price point, cheaper “Android” alternatives are spreading across the globe at a rate of 88% of the 375 million new smartphones shipped in Q3 2016. (Source: “Android has captured a record-high share of the smartphone market,” Business Insider, November 4, 2016.)
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“Pixel,” Google’s new smartphone released in October of this year, is also setting out to challenge the iPhone. Both devices are more expensive, compared to many other Android handset offerings, pitting them head-to-head in the luxury smartphone arena. Google, which is owned by Alphabet Inc (NASDAQ:GOOG), seems to be betting that the Pixel can, in fact, eat away at the iPhone’s strong position, if not topple it entirely. (Source: “Google Confronts Apple To Provoke Pixel Vs iPhone Fight,” Forbes, November 1, 2016.)
The two tech behemoths, Apple Inc. and Google, appear ready to meet on the smartphone battlefield. This is guaranteed to be at the very least entertaining—if not potentially beneficial—to consumers, if the competition can either drive innovation or lower prices.