The iPhone Retains a Lofty Premium Over Its Competition

In the third quarter of 2013, Apple's share of global smartphone shipments dropped to a 4-year low of 12 percent. What many people tend to forget when they claim that Apple is losing in the smartphone market is the fact that Apple still sells its phone at much higher prices than the competition.

According to IDC, the average selling price of the iPhone (that includes all models) was $635 in the past quarter. The average price of all Android devices sold in the same period was just $268. What's even more important though, is the fact that most of that premium actually ends up in Apple's pockets. According to an analysis by Canaccord Genuity, Apple took 56 percent of the smartphone industry's operating profits in the third quarter. The only other company that made any money in the smartphone game was Samsung, with the rest barely breaking even (Sony) or making losses (Blackberry, Motorola).