Apple`s prospects to wane over next 5 years: think tank

Apple has earned 150 billion U.S. dollars in revenues by selling 250 million iPhones worldwide since the smartphone`s launch in June 2007, but the company`s prospects will wane over the next five years, Strategy Analytics of the U.S. said Wednesday.

The amount is just what Apple raked in through handset sales only. If profits from the sale of apps and handset accessories are added, Apple’s revenues will be even more. The company gets 3 to 5 percent of the sale prices of apps and accessories.

Apple’s profitability is known to be higher than those of other handset makers mainly because of the company’s ability to mass produce a few select items. Rivals including Samsung Electronics need to buy a variety of components since they produce multiple handset models, making it difficult for them to cut the purchase prices of parts.

By contrast, Apple can buy the same components en masse at lower prices because it produces just a single brand. By leveraging on such purchasing power, the company is also notorious for forcing vendors to significantly cut the prices of their supplies.

Given that growth of the smartphone market has slowed over time, Strategy Analytics said Apple’s future is not bright. Due to the global economic slump, the outbound delivery of handset makers grew a meager 4 percent in the second quarter this year from the same period last year. With people tightening their purse strings, demand for new mobile phones is declining.

The Android camp led by Samsung is also threatening Apple through lower prices. With manufacturers of handsets running on the rival operating system providing subsidies to mobile carriers, consumers can buy Android phones cheaper.

coolj@donga.com