Samsung sells more phones but not more of the premium smartphone models that rival iPhone. Both smartphone makers sell between 200-million and 300-million phones every year. Apple averages about $650 revenue per phone which gives the iPhone the revenue and profit crown. Yes, I have a bit more math to share.
Smartphone makers come and go and recently more of them have been going. Apple and Samsung take most of the industry’s profits but hundreds of manufacturers push various and sundry models into the market. More recently, smartphone maker OnePlus has made some noise by pushing what some industry critics and watchers call good numbers.
Think premium smartphone at not quite premium prices. In fact, the new OnePlus 6 starts at a mere $529 with specifications that kinda sorta mostly rival iPhone and Galaxy models.
What’s the big deal?
The OnePlus 6 was launched in three dozen countries and sold a million units of what amounts to a non-iPhone, non-Galaxy premium smartphone. A million! By comparison, Apple sells about a million iPhones a day; Samsung, too (skipping Sundays and holidays, of course).
Again, by comparison OnePlus might appear to be doing well but there’s another kind of math to consider. Revenue and profits. Let’s assume for a moment that OnePlus actually gets $529, on average, for the new OnePlus 6 and it becomes both the average and the top seller. That’s about $500-million a month in sales.
At $650 revenue per iPhone, that would seem competitive to Apple’s line, but the numbers do not yet compare. Guesstimators have estimates which put Apple’s iPhone numbers at around 250-million or more last year. At $650 each, that’s more than $160-billion in revenue, and with the highest gross margins, also means Apple owns the lion’s share of profits.
Again, by comparison, OnePlus is a tiny blip on the radar– compared to Apple. Where was Apple’s iPhone 10 years ago? A blip on the smartphone industry’s radar. How did Apple and the iPhone become so successful?
If OnePlus wants to carve a similar success story it needs to do what Apple has already done and continues to do. Build a better mousetrap. All premium smartphone models have similar hardware specifications– chips, storage, speed, camera, displays, graphics, etc. Only one of those successful phones does not run Android OS.
That means any Android maker already has a difficult job competing against Samsung, let alone Apple because differentiation is a key component of successful marketing. Apple and the iPhone toppled many traditional smartphone makers over the past decade, but I submit this– Android’s copycat OS is the biggest reason the entire industry went through this massive upheaval, and yet today, Android itself is what prevents other smartphone makers from successful competition against Apple.
If all non-Apple smartphones run Android OS, only a few will survive at the premium end of the product spectrum and make a respectable living. There’s Samsung and… well, even the most recent math doesn’t seem to support even industry darling OnePlus.