The darling of the techies everywhere, Apple, is about to release new phones.
They are the iPhone X, iPhone 8, and iPhone 8Plus for outrageous prices, when compared to the offerings from almost any of the other 300 plus companies that produce phones.
The Australian price for the iPhone X will start at $1,579 and up depending on the storage you choose, and there are already concerns that demand will outstrip the capacity to supply. (Is it possible this ‘impending scarcity’ is a pitch to hype early interest? No… Apple would never stoop to that)
According to IDG, Samsung is the current world market leader of units delivered with around 23% followed by Apple with 15%, Huawei with 10%, and the other 295 odd makers fighting for the other 55%. The numbers vary a bit, depending on the researcher, the timing, and a whole lot of factors, but the pattern is consistent.
In absolute contrast, Apple leads the profitability stakes with 83% of industry profits, with Samsung taking just 13%.
Forget the rest.
Which would you rather be, Samsung market leader by units delivered, or Apple, market leader by a country mile in profits?
How can this be?
The technology is now pretty generic; all the phones work well, few of us use all the functionality they can deliver, dare I suggest that most would use less than 10% of their phones capability. Still, enough of us line up to buy the new Apples at double the price of a technically equivalent, or depending on who you listen to, superior, Samsung, or cheaper again Huawei, to make Apple hugely, even outrageously, profitable.
While Samsung and others blather on about their technology, cutting edge flexible screens (in Samsung’s case) Apple while making the observations that their tech is new and leading edge, concentrates on marketing and branding,
This is perhaps the ultimate example of great branding over a long period, resulting in a total, absolute domination of an industry profit pool.
Consider those numbers again, a 15% share of units shipped converting into an 83% market share of the industry profits. This astonishing brand performance comes in a crowded and commoditised market, whose growth while stellar to date is showing signs of flattening.
I did doubt the ability of Tim cook to keep the apple money machine churning after the death of Steve Jobs, but is seems that by beatifying him, and building on Apples remarkable marketing DNA, the ride continues.