Apple completely dominates Samsung in profits -- this stat shows why

Apple took 92% of the total smartphone industry profits last quarter, according to a research note by
Canaccord Genuity analyst Michael Walkley distributed to clients on Tuesday.

This means that Apple’s iPhone is dominating the high end of the smartphone market. It’s the most popular and profitable expensive phone by far.

Here’s one stat that drives that home. Samsung, Apple’s primary smartphone rival, sold slightly more phones than Apple did last quarter — it sold 90 million phones, of which 77.5 million were smartphones and 12.5 million were older feature phones.

Apple sold just about the same number of smartphones, coming in at 78.3 million. But consumers paid way more for an Apple phone.

The average selling price for a Samsung phone sold last quarter was $182. The average iPhone sold for $695 — almost four times the average price of a Samsung phone, according to Walkley’s research.

That’s how Apple can take the vast majority of the smartphone hardware industry’s profit even though it only accounts for 17.6% of the market.

Here’s Canaccord’s takeaway:

Given the Galaxy Note 7 issues and strong demand for iPhone 7 Plus models, we believe Apple will extend its leading market share of the premium-tier smartphone market installed base during 2017.

We believe these trends enabled the iPhone installed base to exceed 570M exiting 2016, driving record December quarter services revenue.

We also believe the impressive installed base should drive strong iPhone replacement sales and earnings, as well as cash flow generation to fund strong long-term capital returns.

While we anticipate a stronger upgrade cycle in 2018 with the 10-year anniversary iPhone 8, our surveys indicate solid iPhone 7 demand that should bridge the gap until a new form factor iPhone is likely released in September.

Cannacord rates Apple a buy and raised its price target to $154.

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