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Analysis of 2015

Revenue per segment


According to Apple, this was the most successful year in terms of revenues as it increased to
28%($234 billion)

We can still see that iPhone had significant contributions like it has been doing in the past.
More than 66% of the revenues which is equivalent to $133 billion came from iPhone sales
alone and the number of sales has increased by almost 36.8% when compared to the year
2014.

This could also be a result of successful launch of iPhone 6 & iPhone 6s which were released in
the last 2014 which had significant changes in their flagship product. The screen size was
increased from 4.7” to 5.5”
Followed by iPhone it was iPad which led the revenues by contributing 9.9% of the total
revenues earned. Even though iPad have the market leaders since the time of its inception the
market share has significantly reduced from 61.2% in 2011 to 24.5% in 2015. This reduction in
market cannot be credited to one company but it has to be given to numerous companies
which has entered into this market.

Market Share & Profits

Even though Apple had the highest revenues and profits, the overall market is led by Samsung
by a significant margin

The reason behind this might be the variants which Samsung offers across different markets in
the mobile industry. Both the companies have lost the market share over the years and new
entrants like Huawi & Xiaomi which targeted the lower segment of the industry gained
significant market share. More features in less price was the key for this increase in market
share in the smartphone market.

Apple is the only company which was able to charge a premium from its customers even
though other companies where playing on price and features to attract more customer. The
number support the above statement as an average iPhone was costing around $603 in FY2014
it increased the price to $671 in FY2015. But Android compatible smartphones which have
lower price due to a variety of high- & low-end products in expected to follow the trend of
dropping the pricing to $214 from $254 in FY2014. This phenomenon is common which
products are commoditized and the only differentiating factor remains price and the only way
to increase the market share.

This effect of the above phenomenon can be clearly visible on the profits of the smartphone
industry as only Samsung and iPhone were the only two companies in the top 8 smartphone
manufacturers to record profits and all the other companies lost money. The same can be seen
in the pic below.
R&D EXPENSES

One can see Samsung being the forefront in R&D expenses and this can be understood from the
fact that it has a wide range of portfolio of products thus to stay ahead of the competition and
survive this cut throat competition one has to invest a lot in R&D and try to gain that first
mover advantage. Apple has also been doing the same but the numbers support the fact that it
concentrates on very few products and thus less expenditures on R&D.
Apple provided the following guidance for its fiscal 2016 first quarter:

 revenue between $75.5 billion and $77.5 billion


 gross margin between 39 percent and 40 percent
 operating expenses between $6.3 billion and $6.4 billion
 other income/(expense) of $400 million
 tax rate of 26.2 percent

Going forward apple can obtain these results by coming up with different variants in the
products which are superior and unique in terms of specifications and features. This were very
reason why 6 & 6s mobiles were a hit.