Categories

The Rawr Chart

The challenge with any performance metrics is that there is no single measure of business performance which is conclusive. The last few posts have covered mobile phone vendor performance measured by various methods. Growth (sequential, yearly and compounded multi-year),  margins, shares (units, profit and sales), rankings and time series. I’ve distinguished between smartphone pure plays and the diversified. Each is trying to shed light on what is a multi-dimensional puzzle.

I’ve used various charting tools and visualizations and they each render some clues, but the following chart is one of my favorites. It shows the way operating profit was distributed among the top vendors.

The areas each represent the profit from mobile phone sales in Q1. The horizontal axis shows the volume of units and the vertical the profit per unit. It thus shows how “efficiently” profits were captured a unit basis. It also shows at a glance the different strategies employed and how they reflect performance. It shows who made money and who didn’t. It shows the magnitude of differences.

The shape of this chart has not changed in the last few quarters but it prompts speculation on how it might change in the following few years.

I struggled to find a catchy name for this type of chart but @JustinD put it well here. Rawr indeed.

  • Bob Van Valzah

    A great way to visualize the data. I can't think of a better way to rate company performance. I think Edward Tufte would approve of this visualization.

  • http://twitter.com/lantinian @lantinian

    This is a great chart indeed. It clearly shows that should had there been no more room for growth for any of the players and a price war ensues, Apple will beat all others into bankruptcy even if all their profits per phone were combined.

    What the chart does not show is that Apple actual coverage of the potential marker is far from complete both from number of carriers signed on to cell the iPhone and price categories to cover all people.

    What would this chart look like if instead of million of phones sold you had something to demonstrate the above point.

    What about percentage of the population the Apple phones are available to. It will be really interesting to see how much of the potential phone market has Apple addressed so far and taking all this profit from. This metric should not only take into account sighed on carriers but people income in the available countries. (Hint: iPhone did not sell well in India not because it was no available or because people did not like it)

    I think such a chart will better demonstrate Apple potential for growth and profit edge at the same time, give that all other vendors are seasonal players with established markets

    Keep up the great work

  • Jon T

    Fantastic graphic. Can the same be done for desktop/notebook pc manufacturers. It would show a very similar position. And for tablets, the chart would be even more exaggerated, though Apple would hold both the volume and profits.

    • http://info-tran.com Info Dave

      The tablet chart would have Apple as a big box, with a few small lines and dots representing the rest of the market.

  • Narayanan

    It is incredible that Apple has left so little wiggle room for the manufacturers to decrease prices any more. The main threat is coming from the low cost manufacturers, ZTEs and Huaweis etc.

    Including them will make the picture more clear and will bring out Apple's price leverage better.(if you can get the data).

    Once again a very solid visualization( better than the last one).

    • KenC

      Yeah, it's the Nokia squeeze. Intense competition at the high-end smartphone segment. And, intense price pressure from the ZTEs and Huaweis.

  • Pingback: Relación entre teléfonos vendidos y beneficios en una imagen | iPhone planeta

  • Steve

    It would be interesting to see this data displayed for each manufacturer's top of the line phones. In other words, do Moto's best Droids actually make any money? How much is Nokia profit per phone on the chart dragged down by the high volume of their minimalists feature phones?

    This would provide some insight into whether the best of the app phone competition has already reached the need to "race to the bottom." If profit per phone and sales volume for the top Androids and Blackberries and WP7s can't compete, then these manufacturers will have to abandon high end performance and design for lower cost in hopes of creating a sustainable business among the non-t-so-tech savy public that still "wants" an app phone.

    • claimchowder

      I agree but I doubt that kind of data is available outside of the phone companies.

  • westechm

    Great presentation. Total number of phones sold on this chart is ca. 270 million/year. How close is this number to the actual number sold world wide?

    Also, the chart shows that although Android may be neck and neck with Apple on a unit basis, it hasn't come close to Apple on an operating profit basis.

  • newtonrj

    Nathan,

    So, ask these same folks if they 'get' money from purchasing Motorola and LG who lose money to sell a phone. -RJ

  • asymco

    By this logic buyers should seek out the products of companies who are selling at a loss (logic would imply that these companies are, in a way, giving money back to their customers.) Suggest LG and Motorola. Better yet, companies which have shut down completely are incapable of obtaining excess profit from their customers so their products would be the most valuable. Suggest BenQ, Siemens or Alcatel phones.

  • A.M.

    "If profit per phone and sales volume for the top Androids and Blackberries and WP7s can't compete"
    One doesn't need Apple sized profits to stay in the market. HTC is carrying along alright.

    "By this logic buyers should seek out the products of companies who are selling at a loss (logic would imply that these companies are, in a way, giving money back to their customers.) "
    Yes they should, if the price difference is due to the profitless product having more valuable features. They shouldn't if Apple's profit advantage is due entirely to its economies of scale, i.e. making a similar phone for much less than rivals, due to the higher number made, reduced overhead, etc.

    One possible addition to the chart, though inelegant: a number indicating the area of each rectangle, i.e. total profit. It's a little hard to tell if, say, Nokia is making more profit than Samsung.

    Are you using Many Eyes for your visualizations?

  • FalKirk

    "When charts like these are shown to those who support non-Apple products, they point to the fact those who buy from Apple are 'paying more than the product is worth as evidenced by the per-unit net profit.'"

    Tell them to focus on value, not price. I don't give a damn about how much profit Apple makes. It's irrelevant to me. All I care about is the value I receive from my purchases. Apple consistently provides me with far more value for my money – far more "bang for my buck" – than do other sellers. That's why I return them them again and again.

    Better yet, tell them to read "Atlas Shrugged". If nothing else, it's a big book and it will keep them occupied for a long, long time.

  • gctwnl

    The one form Justin has Moto in the black, this one has moto in the red. And second question: why this order?

    • asymco

      The one from Justin was from February. No particular reason for this order though I wanted to keep HTC, RIM and Apple together.

  • CndnRschr

    Any comments on the analyst note saying that the RIM PlayBook has sold 250K units so far? If true, it shows that RIM is outdoing Motorola Xoom sales which is interesting. Not in the iPad league (what is?) but the reviews of the PlayBook basically panned it for being unfinished. I think we tend to underestimate RIM. As Horace's graph shows, RIM is doing rather well on a profit per unit basis. I think the PlayBook will carve a profitable niche too (although the co-CEOs do not inspire much confidence when put in front of a microphone….). This may change if they are unable to roll out dual processor phones running QNX pretty soon.

    • Steve

      Most of the Playbook critisism that I saw was based on needing a Blackberry to complete it. RIM is all about email and messages; can't do that on a stand alone Playbook.

      I evesdropped on a couple of sales guys the other day. Both had Blackberries. One had a Playbook. He said he loved it.

      • CndnRschr

        Other criticisms were problems with the OS software (as evidenced by frequent updates), lack of apps, lack of availability of Blackberry Bridge from AT&T, etc. Most of these (have) will be resolved over time including the lack of a standalone email/calendar. But RIM seems to be targeting the PlayBook squarely at existing BlackBerry owners which would be a defensive strategy. It will help retain such users within their fold but is not likely to help much in broadening their base. Perhaps that will be tackled when the 3G/4G PlayBook is released although the battery life will be interesting – plus its another data plan to consider. Still, that is a significant market and not having a PlyBook product would likely have been disastrous given their phone product pipeline is decidedly incremental for the next 8-12 months.

    • asymco

      Going by the rule that if the tech press hates a product it will do well, I was quite optimistic about the PlayBook.

      • CndnRschr

        The press hated the Xoom too…. (part of the blame has to go to Google as Honeycomb 3.0 was full of bugs).

  • Steve

    The other way to look at this is that Apple's production costs are lower and they have extracted better terms from the telcos. At AT&T, the premium for an iPhone over a top of the line 3g Android is $150. Over a 4G Android, $50. This is on a 2 yr service commitment of about $2500 or so, so it represents a 2 to 6% premium. Not much in the overall scheme of things:

    32g iPhone 4 is $250.
    Samsung Infuse 4G and Moto Atrix 4G are $200.
    Samsung Captivate and HTC Inspire are $100.
    8g iPhone 3Gs is $50

  • davel

    wow

    i did not realize the huge advantage Apple has on phones. I thought HTC got the same general profit per phone as apple. a bit less but 20%. I thought they made 50-70% of Apple's profit per phone.

    This is a huge advantage.

  • KenC

    Tufte would like that chart. It informs in multiple ways.

  • Pingback: Half A Million iOS Apps = The Longest Infographic You May Ever See | Market To Phones

  • Pingback: Apple and RAWR » Process for the Enterprise

  • Pingback: The Truth About Android vs. iPhone Market Share | ⌘ Links of Plenty – Links and articles for Apple-loving hippie geeks | Mattias Thurfjell

  • Jer

    The thing that I don't understand about this chart is the horizontal axis. If you are stacking the series on top of one another, then you need to display the total volume of phones sold for each series, as well as the total profit (ie. area). I don't know why people are saying that any expert (let alone Tufte) would like this chart because it is so difficult to tell the difference betweeen the series, for example SE phones sold and MOT phones sold. Nobody can quantify any data from this chart. I think it's about half-way to where it needs to be.

    • asymco

      The point is not to show how many phones are sold (there are other posts which show that info in various ways). The point is to show how the companies differ in their strategies. It conveys, at a glance, the strategy difference between two cohorts: the incumbent phone vendors and the entrants.

  • Pingback: The Profit/Phone x Phones Sold Chart | asymco

  • Ex-consultant

    This chart type is not new, it's called a waterfall chart. Though what would be more useful is to re-arrange the blocks from most profitable to least profitable, i.e. Apple on LHS and MOT / LG on the far RHS.

    This type of chart typically shows three info, the size of the market (horizontal axis, millions of phones), the total profits available in the market (total area under the blocks) and average profitability of the market & who is above average and who is below (average profitability line can be drawn over this chart to show who's above the line and who's below the line).

  • Josh E

    How did you create this chart? I haven't been able to find a tool to do so. Thanks!

    • asymco

      This chart is hand-crafted. A scatter plot is used to form the corners of each rectangle but the "bar" is a drawn object.