We’ve known for some time that Android smartphones have been stealing market share from Apple Inc. (NASDAQ:AAPL). However, Apple has managed to hold onto most of the profits from smartphones, even though it’s losing market share, and that continues to be the case, according to Forbes contributor Tony Bradley.
Android pounds Apple in market share
IDC’s most recent data shows that during the September quarter, Android phones were 81% of those shipped. That means four out of five smartphones shipped during that quarter were running the Android operating system. Apple had a mere 12.9% share of smartphone market shipments during the quarter.
But do you think Apple really cares about losing market share? Bradley doesn’t, and he might be right. It’s all about cold, hard cash, which the company continues to rake in, even though its smartphones are waning in popularity.
Apple snags the lion’s share of profits
Data from Canaccord Genuity shows that even as Apple Inc. (NASDAQ:AAPL)’s share continues to decline, it still brings home the bulk of the industry’s profits. In fact, the company raked in more money than all of its competitors combined, snagging 56% of the mobile device market’s profits.
A closer look at this data indicates that Android isn’t really Apple’s biggest concern. It’s Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) (no surprise here). Samsung had 53% of the market’s profits during the third quarter, so when you look at it that way, Samsung is nipping at Apple’s heels. In fact, Samsung and Apple are dominating the mobile device market so much that their profits made up more than 100% because all other device makers actually lost money during the quarter.
Apple laughs all the way to the bank
Within all of Android, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) made up 39.9% of the shipments during the third quarter. According to IDC, two-thirds of the devices which run Android are cheaply made, junky ones.
So if these cheaply made devices are such a big portion of the Android market, then it should come as no surprise that Apple Inc. (NASDAQ:AAPL)’s users log more hours on their devices. Granted, Android records more app downloads than Apple, with 75% of them being Google, compared to 18% for Apple. However, Apple still raked in about half of all the revenue from apps during the third quarter.
So does the company really need to worry about market share? Only if the competition starts making better phones which cost less and if Apple Inc. (NASDAQ:AAPL) fans stop buying the company’s devices even if they underperform these less expensive competitors.