An interesting article here, looks at how Apple’s iphone has blown away the competition in terms of profitability. Though only 3% of the handset market, the iphone has generated more profit for Apple than the other manufacturers combined. In a way, it’s not surprising. Apple do not sell cheap handsets, and they have also dictated the price plans to the mobile operators. In fact, when you throw in the app store, everything that Apple do is geared towards high profit.
The key point, however is that Apple are neither after the biggest slice of the market nor the biggest selling handset. I suspect they are quite happy with their 3%, but highly profitable share. I have argued many times on this blog, that the iphone is a niche product when looking at the overall handset market. I say that, because many marketers and ad agencies seem to think that it is the ONLY handset out there. Or at least the only one worth thinking about. As Android takes a hold with some great handsets from Samsung and Motorola, then the iphone’s share of the smartphone market may indeed fall. But with the kind of profits that Apple are showing, why should they worry?