In the booming world of mobile technology, there's Apple (NASDAQ:AAPL) and then there's everyone else.
The last 12 months have been nothing short of astounding for Apple and its shareholders. After struggling in late 2012 and early 2013, Apple regained its mojo by moving into larger screen iPhones. Its most recent earnings report was arguably the greatest ever, and its market capitalization has grown so large that it's nearly twice as valuable as the second most valuable company on Earth.
However, despite all the superlatives, accolades, and records Apple has enjoyed lately, one analyst recently release a fresh set of figures that might be Apple's most impressive yet.
Dominant, even by Apple standards
Recently, longtime Apple analyst Michael Walkley of Canaccord issued a note discussing Apple's most recent quarterly report. As you can probably imagine, the report was largely positive, but there was one number in the report that truly stood out to me.
According to Walkley's estimates, Apple generated an impressive 93% of the total industry-wide profits in the smartphone market in last year's fourth quarter.
Forget impressive, that's nothing short of amazing.
For those that aren't familiar, Apple and rival Samsung consistently generate the bulk of the profits in the smartphone space. In fact, since so many of their rivals operate at either break-even or a loss, the duo has actually been credited with technically producing more than 100% of the profits in the mobile space in recent quarters. However, the degree of the profits that fell in Apple's favor have never anywhere near this one-sided. So, what caused this especially dominant performance?
Behind this number
It's important to note that a few factors contributed to Apple's especially dominant showing in last year's fourth quarter, the first of which was Apple's own outstanding financial performance during the period.
Remember that the smartphone market's economics grow less and less favorable as the average selling price (ASP) of a handset declines. However, as emerging markets continue to produce the bulk of the growth in the smartphone space, many OEMs are understandably tempted to wade into this economic wasteland in the age-old effort to continue to grow no matter what the cost.
Only Apple has remained above this "race to the bottom" mentality, instead maintaining its stubborn solidarity to the high-end of the smartphone market that consistently produces the bulk of the market's profits. It's truly telling that in a period in which Samsung enjoyed an average selling price of its smartphones of respectable $206 that Apple managed to essentially match Samsung's unit shipments while still maintaining a device ASP of $698. Apple was truly clicking on all cylinders last quarter.
But can it continue?
The short answer is "yes," for a few reasons. For starters, Apple's shift to larger screen sizes with the iPhone 6 and 6 Plus position Apple's smartphone portfolio to succeed in emerging markets where these devices prove especially popular. According to IDC, Apple was one of two smartphone firms to more than double its market share in China during Q4 with the other being the scrappy Xiaomi, which remains largely tied to the lower end of the smartphone space (for now).
And then there are the litany of non-iPhone growth drivers that Apple also enjoys, any of which will also either help support or increase Apple's stock price in the quarters to come. There's Apple's on-going capital-return program and the likely dividend increase investors could see as soon as Apple's next quarterly report. On the new product front, Apple Watch is due to market in April, which should create an entirely new long-term revenue stream for Apple.
And then there's the "things to come" part of Apple's product lineup. Items like a TV, a car, or who knows what else all smack of fresh sales opportunities for Apple. So while quarterly like its recently reported one make it easy to get lost in focusing on the iPhone alone, there are plenty of reasons that investors should continue to like Apple stock today and tomorrow.
Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.