Why was the iPhone so successful

$ 18 billion in profit : Why Apple is so successful

It is the moment of great triumph for Apple CEO Tim Cook. The historic quarterly profit of $ 18 billion confirms that Apple is in a league of its own. The new world record in economic history takes the wind out of the sails of the many skeptics in one fell swoop. A few months ago, a number of observers outbid each other in gloomy doom scenarios.

The group would have lost its innovative strength without its founder Steve Jobs, who died in 2011, it said. The iPhone is too expensive, so Google's Android operating system as well as Samsung and the cheap Chinese manufacturers have already won the battle for the smartphone market. The "Buzzfeed" headline "Apple is doomed" (Apple is doomed to fail) developed into a catchphrase that is now leading an ironic life of its own as an Internet phenomenon on social networks such as Twitter.

Cook sticks to the quality of the brand

In retrospect, it was Cook's greatest achievement to consistently stick to his line in this headwind. Apple wanted to sell the best, not most of the devices, he told analysts a year ago, to whom the 2013 Christmas sales figures did not seem good enough. And no, discounts are not an option. He believes that even those customers in emerging and developing countries who initially bought cheap devices would find the iPhone over time, Cook explained his strategy. He rejected calls for a cheap iPhone. In no case does the hunt for market share want to dilute the charisma of the brand.

Landslide-like success in the Chinese market

With the launch of the larger iPhone 6, Cook surprisingly quickly proved right. The 74.5 million iPhones were by far not only sold in the classic rich markets such as the USA and Western Europe. IPhone sales nearly doubled in Brazil, Russia, India and China. Above all, the landslide-like success in the highly competitive Chinese market is astonishing: According to calculations by the analysis company Canalys, Apple managed to outperform not only Samsung, but also all cheap Chinese rivals such as Xiaomi, Lenovo and Huawei. And the upcoming Chinese New Year celebrations could further boost sales.

Apple has the most profitable customers

The quarterly figures have taken on dimensions that are difficult to pin down. The iPhone business alone, at $ 51.2 billion, was almost twice as large as total sales at the former arch-rival Microsoft. Apple made around $ 2,264 per second. "Apple has a near monopoly on the most profitable customers," noted industry expert Ben Bajarin of analytics firm Creative Strategies.

The company's already gigantic fortune rose to an unprecedented $ 178 billion, although Apple is now distributing heavily to shareholders. In the past twelve months alone, they received $ 57 billion. Cook’s recipe for success also includes the fact that, unlike his predecessor Jobs, he has at least partially given in to investors’s demands for a dividend.

Many Android users wanted the iPhone 6 themselves

However, Cook and his team cannot rest on the success of the fantastic quarter. Finally giving the iPhone a bigger screen was a trump card that Apple could only play off once. So how sustainable is this boom? Cook was "incredibly optimistic". Only a little more than 15 percent of the previous iPhone users switched to the iPhone 6, he said in the telephone conference based on numbers. The share of new customers and those switching from the Android system was highest in three iPhone generations. And Cook does not seem to worry that the iPad tablet computer has now taken a breather after a brilliant start.

The tension on the Apple Watch and Apple Pay is growing

In addition, Apple will open a new chapter in April with the launch of its first computer clock. Cook mentioned the month on the conference call. It's a big bet: Apple wants to establish the computer on the wrist, but many experts fundamentally doubt that a computer watch can be as useful as a smartphone. There are also doubts about battery life.
"I use them every day, I love them and I can't imagine life without them," Cook said. And finally, the iPhone was ridiculed as a playful luxury device when it launched in 2007 - for example by the then Microsoft boss Steve Ballmer.

With Apple Pay, the company has another ace up its sleeve. The digital payment system was only introduced in the USA last October. According to company boss Cook, two out of three dollars spent on contactless payment systems are already processed using Apple Pay. 750 banks and financial institutions now support the system. Cook is certain: "2015 will be the year of Apple Pay". And maybe the CEO will surprise Apple customers with a new version of the legendary saying “Just one more thing”, with which Steve Jobs used to introduce the presentations of major product innovations. (dpa)

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