Canaccord Says Apple Grabbed 93% Of Mobile Profits In Q4, Will Have 650M iPhone Users By 2018

During fiscal Q1 2015, Apple broke sales and profit records, steamrolling over even the most optimistic forecasts by analysts. The Cupertino, California-based company sold a record 74.5 million iPhones during the quarter, and went on to report quarterly revenue and profit of $74.6 billion and $18 million respectively. We must also take into account this key metric with regards to iPhone sales: the average selling price (ASP). The ASP for iPhones during fiscal Q1 2014 was $636.90; the ASP for fiscal Q4 2014 was $602.92; but the ASP for iPhones during fiscal Q1 2015 was a whopping $687.30.

With quarterly numbers like those, this latest report from Canaccord Genuity’s Mike Walkley shouldn’t come as too much of a surprise. Walkley surmises that Apple walked away with 93 percent of mobile profits during the fourth quarter of 2014. He goes on state that Apple will have roughly 650 million iPhone users by 2018, enough to capture one-third of a smartphone market that is expected to swell to 1.82 billion subscribers.

Apple’s domination comes as global smartphone leader Samsung continues to struggle. Samsung’s mobile division witnessed a 64 percent year-over-year decline in profits, even with the release of the Galaxy Note 4 under its belt. And we can’t forget fast-rising newcomers like Xiaomi, which is launching an all-out assault on the Chinese market. The company reportedly has an operating margin of just 1.8 percent.

And even if we look at established players in the market like Microsoft, the company seems to have simply forgotten about high-end smartphones in the past year or so to devote its full attention to budget smartphones like the Lumia 520 that cost as little as $20 off contract. In fact, the Lumia 520 accounts for nearly 30 percent of all Windows Phones sold, but it is likely doing little to add to Microsoft’s bottom line.

According to Motorola, companies like Apple and Samsung may not be able to sustain such high ASPs for their smartphones as consumers come to their senses. “We are going through one of those fascinating shifts where people are starting to realize that you don’t need to pay $600 for a top-tier phone to get a top-tier experience,” said Motorola COO Rick Osterloh last week. “We are an alternative to other premium brands at a much better value. We are very confident in our approach.”

We’ve already seen Samsung falter — primarily due to the weakness of Galaxy S5 sales — but Apple doesn’t appear to be susceptible [yet] to the market pressures of budget-minded rivals.