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According to a new report by research firm, Counterpoint, Apple's profit share declined by 30 percent YoY mainly due to the increased mix of previous generation iPhones. The average selling price of iPhone remained flat YoY while the shipments increased 3 percent YoY.
The research firm said that, in Q4 2017, we estimate that the total profits of Apple will improve driven by its iPhone X sales. Apple exited the quarter with some iPhone 8 inventory due to softer than expected demand compared to the iPhone 7 series.
Counterpoint's Research Director, Neil Shah, added, "Apple continued to command lion share of mobile handset industry profits capturing almost 60 percent share. However, this is down from 86 percent share in the same quarter last year when Samsung had to gulp up a loss due to the Galaxy Note 7 debacle. The Korean vendor though with relatively stronger demand for Note 8 and mid-tier high-scale J series have been able to capture almost a fourth of the global mobile handset industry profits."
Shah said, "Apple still generates more than $150 profit per iPhone sold and this will continue to grow into the holiday season quarter buoyed by the high price iPhone X series. Our recent channel checks across key Apple markets showed the demand for the 256GB version of iPhone X is higher which will boost Apple's profits even higher."
Samsung made a strong come back in the third quarter with its Note 8 series while S8 series continues to perform on par. The profit share reached 26 percent as compared to its loss during Q3 2016 due to Note 7 debacle.
Meanwhile, the report said Global mobile handset profits grew 13 percent YoY in Q3 2017 due to a strong performance of Samsung and Chinese brands.
Counterpoint Associate Director, Tarun Pathak, said that "This is the first time ever when the cumulative profits of Chinese brands crossed $1.5 Billion for the first in a single quarter. Usually, all the profits have been shared by just two brands Samsung and Apple, however, Chinese brands have made inroads here as well."
Pathak said that "The growth of Chinese brands can be attributed to the diligent efforts in streamlining the supply chain with rising mix of mid to high-end smartphones in their portfolio. Even in the premium segment, players like Huawei are positioning their flagship models just below the premium offerings from Apple and Samsung. This strategy is designed to penetrate premium market while maximizing revenue and profit."
The firm pointed out that, Huawei witnessed highest profit growth of 67 percent YoY in Q3 2017 due to its portfolio expansion across price bands, Oppo & Vivo captured the fourth and fifth spot in Global Handset profit share mainly driven by their performance in China. and Xiaomi has made a strong comeback with handset profit growth of 41 percent YoY, it is still behind the market leaders.