ASYMCO: Invaluable


InsightaaS: Across the Net often highlights posts from Horace Dediu’s ASYMCO blog, an interesting source of insight into issues pertaining to Apple, and to the smartphone and related markets generally. This post highlights Apple’s stunning success in the mobile market by connecting three figures: Apple’s share of phone sales (~10%), its share of phone revenues (~35%), and its share of phone profits (well over 60%). As Dediu notes, “The fact that this [Apple capturing 60% of phone vendor profits since 2011] happened without corresponding dominance in units shipped shows evidence of something startling: Consistent value creation.”

The smartphone market continues to grow. 2013 saw total shipment of around one billion units (up from 683 million in 2012). In contrast, non-smartphone shipments continue to decline, with shipments around 800 million (down from 987 million in 2012).

Note that prior to 2012 the non-smart market seemed to be holding steady in spite of the growth in smartphones. The notion that smartphones would become universal was widely dismissed. I certainly heard many objections to my 2010 hypothesis that not only would smartphones become ubiquitous but that it would become increasingly difficult to find anything else to buy. (This in spite of the clearly evident demand for “low-end” non-smart devices.)

I also suggested that the notion of distinguishing phones with the”smart” tag would become irrelevant and that we would just call these devices “phones”. That is coming to pass, at least among the conversations I’m privy to.

So if the conversation is about “phones” and the expectation that all phones will be smart, what can we observe about the market? The following graphs provide the picture of shipments, revenues and operating margin in absolute and relative measure…

Read the entire post: http://www.asymco.com/2014/03/18/invaluable/

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