Apple, Samsung Take 99% Of Mobile Phone ProfitsBy: Shaylin Clark - May 4, 2012
There’s been a lot of discussion lately of who the top smartphone maker is. In the previous quarter Samsung became both the top smartphone maker and the top mobile phone maker overall in the previous quarter, all three of the biggest carriers activated more iPhones.
Ultimately, though, questions of unit sales and market share are secondary. The big question is, simply, who made more money? Samsung may have beaten Apple by just over 7 million unit sales, but which company turned a higher profit? In this, Apple is the winner by a sizable margin. According to a recent study by Asymco, Apple raked in a whopping 73% of all profits in the smartphone market. Samsung came in a distant second with 26%. That, you may notice, leaves a mere 1% for every other smartphone maker to share. As it turns out, though, the other smartphone makers don’t actually share that last 1%. It all goes to HTC. Every other smartphone maker – RIM, Nokia, LG, Motorola, etc. – lost money in the past quarter.
While the percentage graph is impressive, it’s also a bit misleading, as it ignores the changes in the amount of available profit in the mobile phone industry. When the fact that profits have grown dramatically over the past few years is factored in, the picture becomes much more remarkable.
The first graph could make it seem that Apple (and, to a lesser extent, Samsung) ate away at the profits of their competitors, The second makes it clear that, in a addition to that, Apple also drove massive overall growth in the mobile phone market. When the iPhone came along in 2007, the profits for the entire mobile phone industry (which was dominated by Nokia at the time), were around $4 billion. In the years since the iPhone – and especially since 2010, the mobile phone market’s profits have grown astronomically, due primarily to the iPhone.