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Apple’s crazy iPhone sales prove that hardware still matters

As vast and sophisticated as the mobile tech industry may have become, in the end it still relies on some very basic ways for making money. You can either sell hardware, like Apple’s doing, or sell ads, which account for roughly the same proportion of Google’s regular income. Netflix and Amazon’s Kindle store have found success as cross-platform services, but spending on mobile software is unlikely to ever match that of the old days when we paid for Windows, Office, and Photoshop on the desktop. It’s easier to sell things that a person can touch and interact with physically. This is why HTC is diversifying into selling weird cameras, why LG and Samsung keep churning out new smartwatches in search of a perfect formula, and why everyone at CES earlier this month had a wearable of some kind to show off. And in spite of their lamentations about tough competition, HTC, LG, and Lenovo are all generating profits from their smartphone operations, and Samsung’s recent sales decline hasn’t been enough to put the Korean company on the wrong side of the ledger. None of these manufacturers have a profit driver of the caliber of the iPhone, but they’re running sustainable businesses even while relying almost wholly on Google’s Android software.

Just to illustrate: Apple has sold one billion iOS devices to date, and last year alone, one billion Android smartphones have been shipped (so this excludes tablets). These numbers – Apple’s profits, Android devices shipped in just a year – are insane.

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