As the global handset profits slipped one per cent year-on-year (YoY) in the fourth quarter of 2017, Apple iPhone X alone generated 35 per cent of the total handset industry profits, helping the Cupertino giant grow one per cent (YoY) in the same quarter, a new report by Counterpoint Research has said.
While Apple remained the most profitable brand, capturing 86 per cent of the total handset market profits, the premium smartphone market did not grow as expected.
“Apple grew one per cent (YoY) even with the iPhone X being available for only two months in Q4 2017. The iPhone X alone generated 21 per cent of total industry revenue and 35 per cent of total industry profits during the quarter,” said Karn Chauhan, Research Analyst, Counterpoint Research.
“The share of iPhone X is likely to grow as it advances further into its life-cycle. Additionally, the longer shelf life of all iPhones ensured that Apple still has eight out of top 10 smartphones, including its three-year-old models, generating the most profits compared to current competing smartphones from other OEMs,” Chauhan emphasised.
The global smartphone market has already reached its peak with longer replacement cycles and key smartphone OEMs are now under pressure to book profits. iPhone X generated five times more profits than the combined profits of over 600 Android OEMs during Q4 2017.
Key Chinese players like Huawei, OPPO and Vivo are now looking to scale up the price band, by leveraging their inhouse manufacturing capabilities and bringing innovation to their devices, Chauhan added.
“Chinese OEMs cumulative profits crossed $1.3 billion during Q4 2017. This was driven by the increased mix of mid to high-end smartphones. In fact, the average selling price (ASP) of their flagship devices also increased YoY,” added Associate Director Tarun Pathak.
Apple and Samsung flagship models lead in terms of profits as compared to other OEMs. Huawei was the leading brand among all the Chinese brands, with profit increasing 59 per cent (YoY).
“With an increased mix of flagship sales for key Chinese brands, we expect profit share of Chinese players to grow in the coming quarters,” the report added.