Strange like the government in China is subsidizing it?
!) they led the pack, their brand has value (stores waiting line) 2) they push the price as high as it can be (cold but smart) 3) their products often have higher level of finish <= this is worth a lot, very often you have lower priced product with almost the same specs.. but a ton of 'almosts' create a shitty product. It's surprisingly costly to push a few percent above the pack.
I think it’s a lower margin than luxury watches or clothes, say, where you’re mostly paying for the label, and more comparable to something like luxury cars, where they clearly have to invest a lot in design, materials and manufacturing to make a decent product.
(Having said that, a quick google suggests Rolex’s margin is only about 30%, so maybe all these businesses are more similar than I realized.)
Apple's operating margin hovers around 22%, but their gross margin on iPhones is well over 50%. A lot of the difference is tax trickery - Apple funnel a large proportion of profits to offshore companies, which doesn't appear on their balance sheet.
https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifti...
https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey....
Compare to others, Google subsidise Android development with Ads from Search Engine, Huawei cover most of the R&D expense via their Industry leading telecom infrastructure market, Sony has lot of business to cover for their every losing money Mobile handset, Samsung Electronics, has NAND / DRAM and Semi Fab for their bottom line as well as being a group of larger Samsung.
It is not that Apple made lots of money covering the industry 90% of profits, it is that everyone else aren't making money at all. And in the long run, those who cant get enough cash flow will die out. In 2017 the top 5 brand manage 60% of market shares, nearly 10% higher then last year. We are looking at 65% this year, and very likely in a few years time, Apple, Samsung, Huawei, Vivo / OPPO, Xiaomi will cover 80%+ of market.
You pay a lot for a 500G or 1TB SSD from Apple, vastly more than competitors. I always assumed their margin was higher on the higher tiers.
There is a reason why those brands stay in the high end price brackets over decades. It's not an accident and it's not just a trend. Companies like that have more than one expertise - their core competence like watch making - and top notch marketing departments. That stuff costs a lot of money.
It's interesting to think that luxury brands still have such comparable margins. I guess one could say that marketing is their commodity.