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November 23, 2016updated 29 Jun 2022 6:01am

Apple iOS grabs 91 percent of smartphone profits despite Android surge

iPhone grabs lion’s share of profits as Huawei, Vivo and OPPO surge.

By Alexander Sword

Apple has captured a record share of profits in the smartphone market in Q3 2016 despite declining iPhone sales.

The electronics maker made $8.5 billion in profits in the quarter, a 91 percent share of total profits in the market, according to Strategy Analytics analysis.

Huawei followed in second place with $0.2 billion in profit, taking a 2.4 percent share of the market. This made it the most profitable Android vendor.

Vivo and OPPO took 2.2 percent of the market. The final 2.2 percent was shared between all other smartphone vendors.

The disproportionate profit share of Apple comes despite several quarters of declining revenue and profits. In its Q4 results, announced in October, the company saw revenue and quarterly profit declines of 9 percent and 19 percent respectively year-on-year.

The fall was driven by plummeting iPhone sales, which fell 5 percent year-on-year to reach 45,513 units shipped. This continues the decline in sales that began in Q2 2016. For the full year, sales fell 8 percent compared to 2015.

Linda Sui, Director at Strategy Analytics, attributed the continuing profit dominance to “Apple’s ability to maximise pricing and minimise production cost”.

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However, despite Apple’s dominance in this field, Android also captured a record share of smartphone shipments in Q3 2016, reaching 88 percent. iOS’s market share fell slightly from 13.6 percent to 12.1 percent.

The 10.3 percent rise in Android shipments came alongside a 5.2 percent decline in shipments with Apple’s iOS.

The disparity between Apple’s high profit share and Android’s high market share simply comes down to the higher margins made on Apple products. The most profitable Android vendors, Huawei, Vivo and OPPO, make much of their revenue from selling low-cost devices at high volumes and low margins.

These figures come in the context of 6 percent annual growth in global smartphone shipments from 354.2 million units in Q3 2015 to 375.4 million in Q3 2016.

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