How Apple made itself crunch-proof
Smart, beautiful and as relatively pricey as a certain lager, Apple products make the company huge profits. It was just a case of cracking the desirability codeApple lives on cream - the very top of the market. Researcher IDC says its larger-screened iPhone has pushed Samsung aside to hold a majority of the more expensive end of the market - devices costing more than $650. But it's not just the phone cream that it has grabbed. After 30 years in the personal computer market, Apple has just recorded a historic sales high of 5.7 million Macs in a quarter. Like Stella Artois, Apple positions itself as reassuringly expensive; it is a top-end brand in markets that have mainly been commoditised, with profits drained from all but a few. Apple intends to remain one of the few.
Apple does not break out profits from phones, tablets or laptops, but industry estimates suggest operating margins of at least 28% for the iPhone, on its average price of $670. South Korea's Samsung, the only other phone maker generating substantial profit, has just announced operating margins in its mobile division of 9%. Apple makes more than three times as much profit from iPhones as Samsung does from its mobiles. And the two companies account for all the profit there is in smartphones - LG, Sony, HTC, Microsoft and BlackBerry are all losing money on handsets. (China's fast-growing Huawei, the third-biggest maker, has not announced any results.)
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