Apple's Share of Mobile Phone Industry Profits Pushes Toward 60%
Asymco yesterday published a pair of charts providing an interesting perspective on mobile phone company performance for the first quarter of 2011, comparing units sold against profitability.
![asymco_1q11_volumes asymco 1q11 volumes](https://cdn.statically.io/img/images.macrumors.com/t/b6A0N_hc0yC2PfpGnomMfiGx5HY=/400x0/article-new/2011/05/asymco_1q11_volumes-500x248.jpg?lossy)
In the first view, the eight largest mobile phone brands are depicted according to share of units sold during the quarter, with Apple (shown in dark orange) checking in at about 7% share among those top vendors. Apple is joined by Research in Motion and HTC in a category of "smartphone-only" vendors that were responsible for 16% of the overall units shipped during the quarter by the top vendors.
![asymco 1q11 profits](https://cdn.statically.io/img/images.macrumors.com/t/JZX-zf1WYWoKjj9J33iKdNXs4Bk=/400x0/article-new/2011/05/asymco_1q11_profits-500x249.jpg?lossy)
But in looking at the profitability of those top eight vendors, a very different view emerges with Apple accounting for about 57% of total profits and Research in Motion and HTC pitching in to give the smartphone-only vendors over 75% of the total profits among the top vendors. In addition, three of the five "diversified" vendors (LG, Motorola, and Sony Ericsson) drop out of the picture entirely in the new view as they were each unable to turn a profit on their mobile phone businesses during the quarter.
Asymco's Horace Dediu argues that the trend of smartphone vendors dominating industry profits will force the "diversified" vendors to refocus on smartphones, further driving the shift away from so-called "dumb phones" and leaving that market to lower-tier vendors.
I've suggested before that I don't see non-smart devices being interesting to vendors in the near term. Each additional dumb phone added to a portfolio will decrease a company's operating margin. The market dynamics are such that I think non-smart phones will disappear entirely from branded portfolios in 3 to 5 years.
Apple's profit share of around 57% for the quarter is up from 50% in Asymco's study for the fourth quarter of 2010 and continues a trend that has seen the company grab an increasingly large portion of industry profits over the past several years.
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