Last One Standing

The bad news keeps rolling in for HTC. Sales have fallen by (75%) since the September quarter of 2011. No one remembers when the last profit was seen. The sea of red ink is being forecast until 2017 (an optimistic take, in my opinion).

HTC is simply mirroring a widespread trend in the cellphone business. HTC, Nokia, Blackberry, even Samsung and basically anyone not named Apple is struggling to hang onto market share and turn a profit.

Apple is basically monopolizing profits in the industry(a staggering 92% of all industry profits). Think about that for a moment. I can’t think of a single industry where the market leader takes even 50%, let alone 90% of the profits. Globally. Apple is clearly in a sweet spot and does not look remotely threatened. Though, to be fair, that’s what they said about Nokia which is now an also-ran. Can you name one Nokia model that did not come out 10 years ago? Have the kids even heard of Nokia which was nearly ubiquitous barely 10 years ago? Not even Samsung is safe anymore, with profits dropping there in recent quarters.

The basic problem is that it's hard for all the Android and non-Apple non-Android(Windows phones, hello?) to differentiate themselves, meaning cutthroat competition and terrible margins. Peter Thiel has a point: competition is for losers. All hail the elusive dream of every company: having a virtual monopoly. At this point, Apple seems to be  competing with….Apple. Unless Samsung launches another strong assault on the premium segment of the market, it will forever struggle to catch up.

What about Chinese upstart Xiaomi? Its too early to say definitively. Xiaomi seems to have figured a way to make decent profits on cheap phones, but it remains to be seen whether the trend will continue, with the competition being relentless.

Will Apple be the last cellphone making standing when it’s all said and done?