Five years later, iPhone revenue hits $150 billion

A new report from research firm Strategy Analytics reveals that total iPhone sales have also been estimated 250 million worldwide.

Apple's iPhone 4S.
Apple's iPhone 4S. Apple

Apple's iPhone has been a sales juggernaut since its launch. And a new study from research firm Strategy Analytics seems to drive that point home.

Since the iPhone's launch in June 2007, Apple has generated cumulative revenues of $150 billion, according to Strategy Analytics. Neil Shah, senior analyst at Strategy Analytics, told CNET in a phone conversation today that the number only includes hardware sales. Accessories, apps, and software and services, which typically represent 3 percent to 5 percent of Apple's iPhone revenue each quarter, were factored out.

Moving on to hardware units, Strategy Analytics said that 250 million iPhones have shipped globally.

Despite the obvious good news for Apple, the research firm is not necessarily sure that Apple can hold on to the same level of profits it has secured in the iPhone market over the last several years.

"There are emerging signs that the iPhone's next five years could get tougher," Strategy Analytics executive director Neil Mawston said today in a statement. "Some mobile operators are becoming concerned about the high level of subsidies they spend on the iPhone, while Samsung is expanding its popular Galaxy portfolio and providing Apple with more credible competition."

According to Shah, the "concern" carriers are having comes down to economics. He told CNET that with Apple's $600 wholesale iPhone price to carriers, companies like AT&T and Verizon are forced to take a $300 to $400 hit when they sell the device for $199 or $299 with a two-year contract. And Apple, seeing that it "has the selling power," is unwilling to negotiate that pricing, Shah says.

It's a much different story for popular Android-based devices like the HTC One X or the Samsung Galaxy S3. Shah told CNET that while the wholesale price on the Galaxy S3 is high -- he believes it's about $500 or $550 -- carriers have been able to negotiate that down to $400 or so, making the chances of them quickly getting their cash back much higher.

"The Galaxy S3 subsidy is considerably lower," Shah told CNET, adding that popular Android-based devices could make carriers think twice about playing so nicely with Apple.

Still, not everyone is so sure that carriers will do much to change things. In a research note published last month , Morgan Stanley analyst Katy Huberty said that all three U.S. iPhone carriers are required by contract to provide certain subsidies, and those agreements will remain in place for years. What's worse for carriers, the contracts won't expire at the same time, effectively eliminating their chances of teaming up on Apple to lower subsidies.

Apple, meanwhile, is free to continue to rake in the cash.

 

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