Apple, Samsung Snag 99% of Mobile Phone Profits
May 4, 2012 11:53 AM
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Apple commands 73%, Samsung captures 26%
It's no secret that Samsung and Apple are dominating the smartphone market. According to
IDC's figures for Q1 2012
, Samsung had a 29.1 percent share of the worldwide smartphone market while Apple was not far behind with 24.2 percent.
With Samsung and Apple together commanding over 50 percent of the smartphone market, you would expect for them to take home a healthy portion of profits as well. While this is true, according to Asymco, the disparity between the profits reaped by Samsung and Apple compared with the also-rans in this sector is astonishing.
According to Asymco, the pair accounts for 99 percent of worldwide mobile phone operating profit. Samsung is using its nearly 30 percent share of the smartphone market to obtain 26 percent of the profits.
However, the biggest winner is Apple, which is pulling in an estimated 73 percent of the profits from the mobile market. Apple's performance shouldn't come as a surprise to many considering that the
company pulled in $11.6 billion in profits
during the first quarter (fiscal Q2).
HTC barely made a blip with just 1 percent of operating profits. LG,
, and Sony have all posted losses with regards to their respective mobile phone divisions, so they don't even factor into this equation.
Samsung Galaxy S III
"Seen this way, the story isn’t so much that Apple 'took the profits from the incumbents'", stated Horace Dediu of Asymco. "Rather, it’s that Apple created a vast new pool of profits. And one need not look far to find out where they came from: operators. These profits were mostly carrier premiums for the iPhone 4S."
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5/7/2012 3:16:42 PM
1) Yes. The total profits has grown significantly. Apple and Samsung have taken nearly all of that growth, while the others have taken almost none. Neither has really taken anything from the other.
2) No. It is not brand loyalty. It is resistance to change, once time and money have been spent learning a particular OS / user interface. LG and Motorola sell lots of Android phones, they just have very low or negative profit margins either because they cannot make them as cheaply as Samsung does, or more likely, they don't have as a sweet a deal with the major carriers.
3) If the premium for an iPhone has to be reduced to be competitive with lower priced Android phones, then yes, the carriers certainly won't eat all of the loss and not pass any on to Apple. Make no mistake. The carriers are in nearly full control of the market.
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