Tuesday, August 11, 2009

The iPhone, Apple and Market Share

Not surprisingly, the iPhone has surpassed the iPod as Apple's second biggest source of revenue. In fact, the revenue for the iPhone accounts for 32% of the handset industry's profits. I expect a continuing greater focus on OS X-based mobile devices (e.g. the iPod Touch) and a move away from traditional iPods. It's possible that in the near future, the only true iPod available will be the shuffle. Don't underestimate the importance of the iPhone app store on the shift in product focus.

Goodbye iPod, hello iPhone
Apple passed an important milestone last quarter that nobody on Wall Street seems to have noticed: the iPod, once Apple’s (AAPL) No. 1 source of revenue, fell into third place after the Mac (No. 1) and the iPhone (No. 2).

Think of Apple’s business model — as Steve Jobs often does — as a three-legged stool: Mac, iPod, iPhone. As recently as 2006, the iPod leg accounted for 55.5% of Apple’s revenue. By last quarter, its share had shrunk to less than 18%.
iPhone grabs 32% of global handset profits
Apple's iPhone now accounts for 8% of all mobile phone revenue and a whopping 32% of the industry's handset profits, according to figures published by Bernstein Research analyst Toni Sacconaghi.

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