Apple takes 85% of the profit pie, outperforms struggling smartphone market in 2022

Apple saw a new high in its share of profits from global smartphone sales in 2022, according to a report from Counterpoint Research. The tech giant collected 85% of operating profit and 48% of revenue from smartphone sales over the course of the year, making new peaks for the company 15 years into the iPhone's existence.

According to Counterpoint Research, the global smartphone market experienced a decline in Q4 2022, reaching 304 million units shipped, a decrease of 18% YoY. Despite the decline, there was a 1% increase in shipments quarter over quarter, totaling 303.9 million units. The full-year 2022 saw a 12% decline in shipments, reaching a low of 1.2 billion units since 2013. The global smartphone revenue also decreased by 9% to $409 billion, the lowest since 2017.

However, Apple saw a breakthrough in the market as it replaced Samsung as the top smartphone player in Q4 2022, driven by the launch of the iPhone 14 series.

Commenting on Apple’s performance, Research Director Jeff Fieldhack said:

“Having proficiently managed its production problems, Apple was able to weather a year already marred by economic and geopolitical turmoil better than other major smartphone players. Its iPhone Pro series continued performing well and its share of iPhone shipments could have been even higher if not for the production issues caused by the COVID-19 breakout at the Zhengzhou factory, which produces the vast majority of Pro series volumes. As a result, some Pro series volumes got pushed to January.”

Back in November, Apple had already warned of a short supply of its flagship iPhone 14 Pro series, as COVID-19 related curbs continued in the "iPhone city" of China's Zhengzhou district throughout the end of 2022. Despite the supply issues, the iPhone-maker still managed to retain its high-margin profits.

The success of Apple can be attributed to the premium segment, its primary market, being less impacted by the economic and geopolitical uncertainties of the year. The preference of smartphone users for premium devices that have a longer lifespan also aligns with Apple's reputation for producing high-quality products. This trend has further boosted Apple's performance in the smartphone market, allowing the company to achieve its highest-ever shares in shipment, revenue, and operating profit in 2022.

Counterpoint Research further predicts that the global smartphone market will remain under pressure until the end of the first half of 2023, before a recovery is expected to begin.

Apple takes 85% of the profit pie, outperforms struggling smartphone market in 2022