Yet, in at least North America, equivalent "high end" Android smartphones cost the same on contract and even off contract than iPhones. I can get an older iPhone 5c for free (probably a 5S is I go with a smaller carrier). Where are people paying a "premium" for the iPhone?

Is is that not enough people choose the flagship Android devices to move the needle? I'm genuinely curious/asking because it seems/appears there's some parity (price) between the current flagship Android devices and Apple's newest.

Also, profit formulas aren't that simple. You have consider Apple's costs vs their revenue for each phone, and also their contract terms with providers vs other phones. I don't know the details. But perhaps Apple earns more for their phone contracts even if consumers pay the same. One thing we do know is that Apple leads the world in an extremely well-oiled production pipeline and network of suppliers that no doubt also helps keep their costs down and thus their profits high. I doubt Android manufacturers are operating at that same margin.

Good points. I would imagine that Apple has a better supply chain, and more aggressive/favorable terms with each provider than competing smartphone makers. I'm not sure it accounts for the entire difference. I wonder if there's a middle area or marketplace where people pay disproportionally more on average which helps this figure (92%) climb so high.

> But perhaps Apple earns more for their phone contracts even if consumers pay the same.

Considering the demand for iPhones a few years ago I'd be amazed if this wasn't the case, I suspect the carriers also pay a chunk of the advertising if it's an exclusive deal.

I think this is it exactly. The number of people who buy high end Android phones is a tiny slice of the total Android market. The vast majority are the same people who bought Nokia candybars in the past--people looking for whatever they get for "free" on contract.

This is also why the Apple app store sells so well compared to the Google Play store. People with crap low end Android phones struggle to run many apps, and their phone didn't come with enough storage for them.

"...their (crap low end Android) phone didn't come with enough storage for them"

My brand new iPhone 6 only has 12 GB of usable storage. I'm currently using more than half with only a small selection of apps, photos and music. IMHO that's pretty crap - and I paid a premium for it (doh!)

Android phones for some reason rarely come with enough storage. It's easy to buy 8GB phones, and Android is less space efficient than iOS. The only saving grace is that they often include uSD slots, although convincing your apps to use that space can be difficult sometimes.

Well I paid $1000 including Apple Care for my iphone, so that's a pretty hefty profit to Apple!

Those really are incredible figures when you think about it. 20% of market share reaping 92% of the profits. Is there any comparable in any other industry? Ever? I'm currently in the android camp but I have to say I'm astounded how Apple consistently pulls off these kinds of numbers.

And would that not mean that their phone is more desirable? Lots of things are desirable that are not affordable and are not, therefore, purchased in vast quantities.

Depends how you quantify "desirable" but since there are many more Android phones in the world than iPhones, some would say that means Android phones are more desirable. But either way, that really has little to do with profits. If I sell just one item in my entire life for a million bucks, something that cost me ten bucks to make, that is pretty impressive profits, even though it was not desirable since only one person bought it.

I think you can only associate desirability with units if you hold other things equal: price, availability, etc.

I wonder if someone has done marketshare numbers with respect to flagship phones. I thought the Nexus 5 was a great phone for $350, but then the Nexus 6 went back to full flagship price and pushed me back to an iPhone for that amount of money.

My thought is, if Apple is pulling all of the profits then they are the flagship to buy if someone is in the market for a flagship phone. Otherwise, if someone is buying on price it is Android all the way.