Apple has the Biggest Profit from Smartphone Sales

Apple has the Biggest Profit from Smartphone Sales

As the new iPhones were recently released and Samsung is working hard on the Galaxy S10 and the rumored Galaxy F, the world of smartphones has become an interesting topic.

You may have wondered which of the smartphone manufactures has the biggest revenue.

Looking at the hard numbers is always a good idea as they are the prime source of information.

If we look at the number of units sold, Samsung is the king as it shipped approximately 317.3 million units in 2017. In the same timeframe, Apple ‘’only’’ sold 215.8 million units. This means that Samsung sold an additional 100 million units in comparison to Apple. The difference is not as large if you take a keener look. During Q4 2017, Apple sold 77.3 million units while Samsung sold 74.1 million units.

The surprise comes when you look at the smartphone revenue for Q4 2017: Wile Samsung scored $19 billion; Apple reached a whopping $61 million, more than three times the revenue.

Why is the revenue so imbalanced?

First, we have to look at prices. The average smartphone became more expansive in one year as the price went up from $255 in Q4 2016 to $300 in Q4 2017, despite the fact that shipment numbers were going down.

When it comes to iPhones, the average selling price is $800, almost 3 times higher than the average smartphone price. Of course, the revenue is on par as we have already mentioned that Apple has huge revenue from its mobile division. What drives the profit in Apple’s case is the price per unit.

What you can learn from here

One method that can be observed here is offering a greater range of products in order to capture a larger audience.

You can start with one base product and a premium version. While the premium one has more features, the added price will convince many people that the base product is also a good deal. On the other hand, the premium version will attract people that want a superior product and can afford it. If both variants sale well, future versions will be made.

This valuable lesson can help you when you start your own business. You may opt to offer a regular and a premium option. Or add a monthly payment plan that will attract more users. And all you have to do is make them balanced and appealing. If tech giants did it, you also have a chance.



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