Within the mobile sector jungle, Apple is the mouse frightening the elephant. The iPhone is causing all the fear. Apple’s emphasis on brand name and refusal to compete on price has resulted in the biggest chunk of cellular sector profits despite having the smallest a share of the market. Even last summer’s “Antennagate” scandal couldn’t derail the iPhone’s runaway achievement. Because of the iPhone’s gargantuan profit margin, experts say that Android’s growing market share will not probably concern Steve Jobs.
Apple has got the golden touch
Apple’s domination of the mobile industry was reported on September 21 by Fortune on CNN.com. Apple stock was given a “buy” rating and a $ 356 per share price target by Canaccord Genuity, a fund market analysis firm. The analysts used data about Apple’s performance to back up its advice to purchase the company’s stock. From January to June this year, Apple sold 17 million iPhones. That total represents a market share of just 3 percent. The three biggest cell phone makers within the world, Samsung, Nokia and LG, dominated with a combined 400 million units sold. Apple racked up the numbers where they counted. The business amassed 39 percent of market profits 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 al! l. It’s estimated that Apple makes about 50 percent gross margin and more than 30 percent operating margin for its iPhone.
Underneath the surface of Apple’s success
Until the iPhone was created, making nearly 40 percent of industry earnings with a mere 3 percent a share of the market was unthinkable. Apple has far outgained its rivals with more than slick marketing campaigns, according to Jason Mick at Daily Tech. Mick writes that as the iPhone is so popular, AT and T has given Apple an extremely lucrative contract to grow its subscriber base. Apple also uses cheaper hardware than top-of-the-line Android competitors. It uses the recognition of its products to get high volumes at lower prices. This business model has been so successful, money is no object when it comes to developing technology that stays a step ahead of Android. But Mick said, why bother?. Catering to a loyal core of iPhone enthusiasts has gotten Apple this far.
iPhone unhurt by death grip
Apple has been able to maintain a high level of customer satisfaction despite Antennagate. 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. It nevertheless won’t. But the iPhone marches on. According to Computerworld, the J.D. Power and Associates consumer satisfaction rankings for smartphones lists the iPhone at the top of the list—its fourth consecutive first place finish.
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