Apple’s success through its ingenious, simple, and user friendly iPhone was believed to be as good as it gets after the iPhone 4 and 4s. Contrary to the success of the iPhone 6, the iPad after the first fiscal quarter of the year has seen a drastic downfall. Apple’s report of a net profit of “$18bn in its fiscal first quarter” topped the “$15.9bn made by ExxonMobil in the second quarter of 2012”, making it the “biggest ever by a public company.” According to the article in BBC, the surge in iPhone sales derive from a high demand for the new iPhone 6 model.
Furthermore, the article also comments that the increase in profits for the company last quarter has to do with its “untapped” smartphone market in China. Because of Apple’s ability to recognize the potential in China’s smartphone market, they are currently the number one smart phone company in the country. Apple saw an opportunity to expand and improve their market, and the results can be seen in their success in China.
A 22 percent decrease in the number of iPads sold is sure to raise the question of the future profitability margin for iPads in general. A leading contributing factor to the decrease in consumers purchasing iPads is due to the sudden “resurgence in laptop sales.” In addition, less expensive competitor machines have caught the attention of consumers, leading to a decrease in brand loyal customers. It is also believed that the new iPhone contributed to the iPad’s recent downfall, possibly from its increase in size. The size factor blended the gap between the iPhone and iPad, leading to a decrease in iPad sales. Customers may have noticed the undeniable similarities between both products but saw more practicality in the new iPhone 6.
The increase in price from the iPhone 5 to the iPhone 6 Plus model “appeared to help boost profits and increase the IPhone’s gross profit margin.” Additionally, Apple evolved from a “2 percent to 39.9 percent” profit per product following the release of the highly demanded iPhone 6. Selling over 70 million units during the holidays was an astonishing accomplishment for Apple in itself. In reality Samsung sells more phones than Apple, but Apple profits more from each phone, unlike Samsung. The simple fact of the matter is that Apple has grown into a superpower in the technology industry, proving its name alone can raise the price of its products.
In society today keeping up with the trends calls for sacrifice of a few hard earned pennies. The iPhone has separated itself from its smartphone competition simply because of Apple’s brand name. While most smart phones function in the same way with the same technology, not all smart phones have the Apple logo which identifies in the consumers mind as something exceptional compared to the rest. It seems as long as Apple continues to come out with new models, it will continue to be one of the most successful brand names to date.