It’s an established fact that Android is the dominant mobile OS around the world. Estimates claim that Android owns from just over 50 percent to nearly 80 percent of the mobile device market, but Apple is winning where it counts—money. According to data released by Apple it seems the iPhone money train is still steaming along nicely with a record-breaking 13 million iPhone 6S and iPhones 6S Plus units sold in just the opening weekend.
The iPhone 6S and iPhone 6S Plus are really just getting started. On October 9 the devices will become available in 40 additional markets, including Italy, Mexico, Russia, and Spain. Apple says the new smartphones will be available in more than 130 countries by the end of the year, which means the iPhone 6S and iPhone 6S Plus sales figures will just keep climbing.
“Sales for iPhone 6s and iPhone 6s Plus have been phenomenal, blowing past any previous first weekend sales results in Apple’s history,” said Tim Cook, Apple’s CEO. “Customers’ feedback is incredible and they are loving 3D Touch and Live Photos, and we can’t wait to bring iPhone 6s and iPhone 6s Plus to customers in even more countries on October 9.”
As a whole, Android will sell far more devices. The vast majority of those devices are typically Galaxy devices—which Samsung sells in massive volume. Despite outselling Apple significantly in terms of volume, though, Samsung makes a fraction of the profit that Apple does. Apple is making an estimated 92 percent of the profit in the mobile industry, followed by Samsung at a distant second with 15 percent. It adds up to more than 100 percent because the rest of the Android and other mobile device makers actually lose money according to IDC.
This isn’t a new trend either. I wrote about the discrepancy in profit in the mobile industry back in 2013:
It turns out that two thirds of the devices that make up Android’s 81 percent market share are cheap “junk phones”. The remainder is primarily Samsung, which makes up 39.9 percent of the total Android devices shipped.
There is another area where dominant market share isn’t turning out to be an advantage for Android. In spite of a greater than six-to-one advantage in device market share, Android doesn’t sell more apps, or generate more advertising revenue than Apple.
Since then, things have not been going well for Samsung. The company is still the de facto flagship of Android and still sells an impressive volume of Android devices, yet its revenue and profit have been disappointing and declining.
Meanwhile, the greatest frontier for Android may also be the Achilles heel that knocks Samsung off the throne. China is a massive market opportunity for Apple and for Android (and Samsung), but Samsung has struggled there as Chinese competitors are introducing flagship Android devices of their own.
The realities I pointed out in 2013 are still true. Winning in market share is a hollow victory. It might mean something if the larger user base resulted in generating revenue through other means—income from app sales, cloud services, etc.—but Apple generally wins in those areas as well.
Two years ago I said, “Android dominates in market share. Android dominates in app downloads. At the end of the day, though, somehow Apple’s iOS is making all of the money.” Apple is sitting on top of a mountain of cash and continues to make all the money while Android and Samsung weep over quarterly results and figure out how to pay the bills with bragging rights.
