Here we are barely into the 21st century and Apple seems to have more competitors than ever; some well armed with cash and willing to spend it, either strategically or desperately (or, both at the same time). How does Apple fare amidst all that competition?
Follow The Money Trail
Taiwanese smartphone manufacturer HTC, which has a number of highly touted, well reviewed smartphones on the market, in the latest quarter, just lost more money than expected. Again.
To find out how Apple’s competitors stack up against our favorite Cupertino juggernaut, lets’ follow the money trail.
HTC makes some of the best smartphone hardware on planet earth, and by many accounts, better hardware than Apple’s iPhone 5s.
Yet HTC lost money again last quarter. Again. Why? Marketshare has dropped from about 10-percent just a few years ago to barely 2-percent today.
HTC is but one of many smartphone competitors, but it’s Korean conglomerate Samsung which makes all the money that Apple doesn’t make from the smartphone and tablet industry.
That’s right. It’s a two-horse race for profit share, and even though Samsung sells twice as many smartphones and tablets as Apple, it’s Apple which records the majority of the industry’s profits.
The Race For Third Place
What about that long list of also rans? BlackBerry was once the darling of the enterprise, but is gasping for breath, losing money even more quickly this year than last.
Motorola, bought by Google to shore up a patent defense, was sold for near scrap to Lenovo in China. Nokia, once the largest handset and smartphone maker in the world, was sold for scrap to Microsoft.
What of Microsoft? The PC software giant makes money hand over fist with Windows and Office on traditional PCs, but as that segment of the tech industry is under siege from mobile device sales growth, Microsoft is forced to write off lackluster hardware sales and push Office onto the iPad platform.
That leaves a money trail spread between two disparate entities. Google, and a plethora of smartphone and tablet knock off makers from China. By some estimates, Google has devoted over $15-billion to the Android and smartphone effort and has little profits to show for it, and certainly no return on the investment.
Breakeven is about the best Google, Amazon, and other makers can hope for. How so? Apple’s Mac line owns about 50-percent of the traditional PCs profits, and while PCs with Windows or Chrome dominate in sales, profits are nearly non-existent. As to the smartphone and tablet segments, recent estimates put Apple’s share of the money trail at over 80-percent, with the rest going to Samsung.
Marketshare does not seem to translate directly into profits. When there is not much money left on the money trail it makes a technology pundit wonder how much longer Apple’s also-ran competitors can stay in business.