Financial Analysis – iPhone 7 Versus Android Phones

Financial Analysis: iPhone 7 Versus Android Phones

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Financial Analysis

In the recent past, phones have been experiencing declining sales for the recent quarters. However, iOS and Android phones are still leading in the worldwide sales in the smartphone industry. Apparently, in 2015, 14% of the worldwide market share was dominated by Apple, but the percentage fell to 12.9 in 2016. The most outstanding product that has seen Apple’s sales escalate is iPhone 7. The following sales were made for iPhone units between 2012 and 2014; $125,046, $150,257, and $169,219 million. This shows a tremendous improvement of the iPhone products, bearing in mind that iPhone 7 played the greatest contribution in the revenue generated (Grothaus, 2017).

There are, however, two major smart phone operating systems that have captured 99% of the smart phone market today when combined; the iOS and Android. The Android application has over 1.4 million of available applications while iOS form just 1.2 million. The statistics for the sale of smart phones based on their operating systems between 2012 to 2014 show that iOS sold 19.1%, 15.1% and 14.8% for 2012,2013 and 2014 respectively, showing a downward trend in sales (Grothaus, 2017). However, as for the Android application phones, due to their cost friendly pricing, they have a higher percentage margin of sales; 66.4%, 78.7%, and 81.5% respectively. The Android phones have been making higher sales in comparison to the iPhones.

In 2016, 296,912.8 Android units were sold marking an 86.2% market share in the same year; Apple sold 44,395 units for iPhone 7 marking a 12.9 market share. As Apple improved in the sale of the same product in 2015, marking 271,647 units, Apple improved 48,085.5 units. However, the production of iPhone 7 has proven to be costly as Apple uses $224.8 to manufacture a unit phone. The Android operating system products have overtaken the market for Apple regarding the iPhone (Grothaus, 2017). The greatest of Apple’s products is the iPhone which has captured 69% of the current market share in the smartphone industry whereby it generated revenue of $78,692, $91,279, and $101,991 million in 2012, 2013 and 2014 respective; the three consecutive years thus forming the main brand that has been propelling Apple’s revenue generation in (2017) (Yoffie & Baldwin, 2015).

When it comes to the Android application system phones, the 2016, fourth quarter saw a worldwide sale of 352,699.9 units marking 81.7% market share while in 2015 it had made sale of 325,394.4 units marking 80.7% market share in comparison to Apples’ 77,038.9 and 71,525.5 units respectively for iPhone 7 (Yoffie & Baldwin, 2015). Samsung has been the greatest competitor to Apple regarding selling Android operated phones. The iPhone 7 is turning the market round from Android. The iPhone 7 Plus is even better and selling so good accounting for the company’s main source of revenue. On the other hand, such Android operated smart phones as S7 Edge, and Galaxy S7 from Samsung have been dominating the market due to their affordability. Apparently, China forms the main market share for iPhones, but the Android phones are taking over, while the U.S market is still dominated by iPhone 7 and 7-plus (Morningstar, 2017).

The iPhone 7 and seven plus can be said to be the ultimate comeback products for the company after it was on the verge of bankruptcy in 2007; they have continued to be the main revenue generators in the company (Morningstar, 2017). Apparently, there remains a stiff competition between the Android operated phones and the iPhone 7 as it had dominated the U.S financial market while Android products are making huge sales and financial growth due the cost-effective strategies that such companies as Samsung have especially in the Chinese market which is usually the main hub for Apple products (Grothaus, 2017).

References

Morningstar. (2017). Income Statement for Apple Inc (AAPL) from Morningstar.com. Retrieved from http://financials.morningstar.com/income-statement/is.html?t=AAPL®ion=usa&culture=en-US

Grothaus, M. (2017). iPhone 7 vs Samsung Galaxy S7: Which Is The Best Overall Phone? | Know Your Mobile. Retrieved from http://www.knowyourmobile.com/mobile-phones/apple-iphone-7/23410/iphone-7-vs-samsung-galaxy-s7-which-best-overall-phone

Yoffie, D. B., & Baldwin, E. (2015). Apple Inc. in 2015. Havard Business School, 715-456.