Apple's iPhone X generates 35 percent of the total handset profits in Q4 FY17: Counterpoint

The premium smartphone market did not grow as expected and Apple remained the most profitable brand, capturing 86 percent of the total handset market profits.

As global handset profits dipped 1 percent (year-on-year) in the fourth quarter of 2017, Apple's iPhone X alone generated 35 percent of the total handset industry profits, helping the iPhone maker grow 1 percent (year-on-year) in the same quarter, a new report said on 17 April.

The notch on the iPhone X. Image: tech2/ Rehan Hooda

The notch on the iPhone X. Image: tech2/ Rehan Hooda

According to the latest research from Counterpoint's Q4 2017, the premium smartphone market did not grow as expected while Apple remained the most profitable brand, capturing 86 percent of the total handset market profits.

"Apple grew 1 percent (year-on-year) even with the iPhone X being available for only two months in Q4 2017. The iPhone X alone generated 21 percent of total industry revenue and 35 percent of total industry profits during the quarter," Research Analyst Karn Chauhan said in a statement.

"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 ten smartphones, including its three-year-old models, generating the most profits compared to current competing smartphones from other OEMs," Chauhan informed.

The global smartphone market has already reached its peak with longer replacement cycles and key smartphone OEMs are now under pressure to book profits.

"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 year-on-year," added Associate Director Tarun Pathak.

Key Chinese players like Huawei, OPPO, and Vivo are now looking to scale up the price band, by leveraging their in-house manufacturing capabilities and bringing innovation to their devices, he added.

iPhone X generated 5 times more profits than the combined profits of over 600 Android OEMs during Q4 2017.

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 percent (year-on-year).

"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.





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