Despite declining iPhone sales Apple gets 85 of the profit

Despite declining iPhone sales, Apple gets 85% of the profit of the entire smartphone market

Total revenue across all smartphone makers fell 8% annually and 15% quarterly in the second quarter of 2023, falling below the $90 billion mark, analysts calculated counterpoint. Operating income fell 3% quarterly and 27% annually over the same period — the lowest since the second quarter of the 2020 pandemic.

    Image source:

Image source:

But not all smartphone manufacturers have been affected to the same extent by the market downturn. iPhone shipments fell just 3% year over year in the second quarter of 2023, while the overall market on that indicator declined 9%. The company managed to increase the average selling price of devices (ASP) thanks to the increased contribution of the Pro series, the lower contribution of the SE series and the fact that the iPhone 14 Plus replaced the iPhone 13 Mini. Apple’s iPhone sales fell 2% year over year, but Apple’s share of total smartphone maker sales rose 3% year over year to a record 45%. As for earnings, it grew 4% annually and the stock surged 85%, which is also a record. In general, shipments to the market fell 9% over the year, while ASP rose 1%.

    Apple's share of earnings, revenue and shipments in the smartphone market for the second quarter of 2023. Image source:

Apple’s share of profit, revenue and shipments in the smartphone market for the second quarter of 2023. Image source:

The average market ASP indicator has increased slightly, and this is a seasonal effect: the second quarter is equidistant from peak demand for the iPhone and the presentation of new models, it also does not mean the market entry of new premium products from competitors – either Samsung Galaxy S and Galaxy Z Fold/Flip. The operating result also fell in line with the annual turnover of the market as a whole. The latter was negatively impacted by the change in supply structure: Apple’s supply share declined 4% quarter-on-quarter, and Apple is the largest contributor to overall operating income.

Against the background of ASP stagnation, manufacturers’ focus on the premium segment is likely to continue: mid-range brands decided to conquer it, while premium brands began to increase sales of their most expensive models. This will help the smartphone market to generate sales and profits again in the second half of 2023, which in turn will help the market in the face of the reduced supply.


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Johnson Smith

Johnson Smith is interested in Home Theater & Audio, Smart Tech, Google News & Products, How To, Apple News & Products, Cell Phones, Automotive Technology.

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