For the first time ever Apple Inc. (AAPL) has garnered more than 50% of the global smartphone market during the fourth quarter, thanks to its high-end iPhone X.
For the fourth quarter ending in December, which includes the holiday shopping season, Strategy Analytics found the Cupertino, Calif., smartphone marker had 51% global smartphone revenue share, which was more than the rest of the industry combined. In the fourth quarter of 2016, Apple had market share of 48.5% according to Strategy Analytics. Samsung Electronics (SSNLF) was in second place for the December-ending quarter, with just 15.7% market share, up from 14.5% in 2016. (See also: Apple iPhone Prices Will Plateau in Line With Industry Trends: BMO.)
“Apple iPhone generated a huge US$61 billion in the quarter, helped by solid demand for its premium X model, and Apple now accounts for more revenue than the rest of the entire global smartphone industry combined,” wrote Neil Mawston, executive director at Strategy Analytics, in a press release highlighting the results of the latest research. “Apple iPhone’s average selling price [ASP] is approaching US$800 and almost three times higher than the overall industry average. Apple iPhone is an incredible money-making machine.” (See also: Google Overhauling Android OS to Lure iPhone Users.)
Grasping Higher ASPs
Apple’s strong showing in Q4 comes even after it missed Wall Street expectations for iPhone sales in the last three months of 2017, reporting it sold 77.3 million units, a drop of 1% year-over-year and lower than the 80.2 million units Wall Street was looking for. The average selling price of $796 was higher than Wall Street views. On a global basis, Strategy Analytics said smartphone revenue increased 8% annually to hit an all-time high of $120 billion in the fourth quarter. Average selling prices increased 18% to $300 from $255. That, noted Linda Sui, director at Strategy Analytics, all happened with shipment volumes decreasing, underscoring the importance of selling higher-end phones with heftier price tags. Samsung is another handset maker to see ASPs jump in 2017. According to Sui, ASPs jumped 21% to $254 as of the end of the fourth quarter. Premium smartphone sales of the Note 8 and Galaxy S8 were both drivers of growth for the South Korean, company.
For Apple, the Strategy Analytics report its just the latest in a string of good news that has been sending its stock higher this week. One of the big culprits for the positive sentiment on the part of investors came courtesy of Warren Buffett's Berkshire Hathaway Inc. (BRK.A), which revealed it increased its position in the technology powerhouse, ending 2017 with a stake that was 23% higher. The iPhone maker is now Berkshire’s largest stock holding, pushing Wells Fargo & Co. (WFC) out of the top spot. Buffett has been acquiring shares of Apple since 2016.
Meanwhile, with the stock market whipsawing between steep losses and gains since the start of February, Bank of America Merrill Lynch has been pounding the table on Apple’s stock, arguing in a recent research report that it's a good way to weather the volatility in the stock market. And Guggenheim Investments is predicting Apple’s “other” products—which include its Apple Watch, AirPod wireless earbuds and HomePod, its voice-activated speaker—will surpass the iPad as a contributor to revenue, becoming a $22 billion business by 2019.