Premium segment smartphones (US$400 wholesale price) generated almost 80 percent of the global handset profit during Q2 2017, according to Counterpoint Research. Apple dominated the premium segment where profit margins are high as most of its profits come from above US$400 models.
Counterpoint Research estimates that the latest Apple iPhone X will further increase profits for the California-based iPhone maker in the premium segment and overall to record levels. Within its individual portfolio, for Samsung, the US$400+ segment contributed almost two-thirds of the total Samsung profits.
Samsung has a mix of products across different price bands that help the brand maintain an average selling point (ASP) around the world that does not hugely vary from the regional ASP. This in-turn helps the brand move more units or revenues due to the various price differentials but not profits, Counterpoint said.
By comparison, the average selling price for iPhones in developed regions is approximately 150 percent higher as compared to the regional industry ASP whereas in developing regions it can go as high as 650 percent compared to the overall industry ASP in that region.
According to Counterpoint Research Market Monitor tracker, the global mobile handset profit pool declined 10 percent year-on-year during Q2 2017. The main reasons were an increase in the mix of cheaper iPhone models, growth of less profitable mid-tier models in prepaid markets from vendors like Xiaomi as well as sales mix shift for Samsung to mid-tier J and Grand series portfolio.