Apple takes 53% of smartphone profits, Samsung at 50%, remainder lose money

Posted:
in iPhone edited January 2014
Apple remains the most profitable company in the smartphone industry, though its lead over rival Samsung is shrinking, as just 3 percentage points separated the two companies during the second quarter of calendar 2013.

Canaccord


The latest data from Cannacord analyst Michael Walkley shows that Apple took 53 percent of smartphone profits in the second quarter, down from 57 percent in the first quarter, and 69 percent in 2012.

Samsung, meanwhile, has seen its value share steadily grow, from 34 percent in 2012, to 43 percent in the first quarter of 2013. Now, in the second quarter of the year, Samsung took 50 percent of the smartphone industry profits, according to Walkley's research.

As has been the case in the past, Apple and Samsung are still estimated to account for more than 100 percent of the smartphone industry's profits. That's because all other companies are either break-even, or they experienced losses.

Nokia, HTC, LG and Sony Ericsson all saw revenue share of 0 percent in the second quarter, Walkley found. That was still better than BlackBerry, which has a negative 1 percent share, or Motorola, with negative 2 percent.

The figures are based on published company reports, as well as estimated made by Canaccord Genuity. Walkley's report is also the latest data to refute a recent claim that Samsung Electronics had dethroned Apple, Inc., in mobile profits.

As noted by AppleInsider last week, Samsung's IT & Mobile division brought in $5.64 billion in operating profit last quarter, which amounts to just 61 percent of Apple's total earnings.

Estimates such as Walkley's are necessary for comparison because Samsung does not detail exactly how many smartphones it sold in any given quarter. In fact, the company's "handset" business lumps in tablet and PC sales.

In contrast, the Canaccord Genuity figures do not include other mobile devices, such as tablets. Apple Chief Executive Tim Cook noted in his company's most recent quarterly earnings report that the latest Web browsing share data shows that the iPad accounts for 84 percent of tablet traffic.

"If there are other tablets being sold," Cook said, "I don't know what they're being used for."
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Comments

  • Reply 1 of 61
    drblankdrblank Posts: 3,383member
    Well, I'm sure if Apple has newer smartphones in the wings, the amount of profits for Apple will increase. I wouldn't look at just whats happening during a 3 month period before new product announcements. In addition, Apple needs to sign deals with China Mobile and the largest carrier in Japan. Then they need to come out with their replacement hand sets and a larger hand set and then the profits should come right back.

    Samsumg is the only Android maker that actually makes any profit, but that's because they make components. That's the ONLY reason.
  • Reply 2 of 61


    It makes no sense to look at just one quarter, especially when people are (rationally) waiting for a thinner, lighter, faster, more memory-laden one to come along in the next couple of months.


     


    Why don't we wait until the end of the year, and revisit these shares...

  • Reply 3 of 61
    gustavgustav Posts: 823member
    Uhm, the headline adds up to 103% of the profits.

    That is not valid in the slightest bit. If another company has a loss, then it's zero profits, not negative profits.
  • Reply 4 of 61

    Quote:

    Originally Posted by Gustav View Post



    Uhm, the headline adds up to 103% of the profits.



    That is not valid in the slightest bit. If another company has a loss, then it's zero profits, not negative profits.


     


    I'm 103% sure that "loss" and "negative profit" are synonymous.

  • Reply 5 of 61
    maccherrymaccherry Posts: 924member
    Oh no he didn't!
    I don't know what they are being used for? LOL!
  • Reply 6 of 61
    It is unfair to compare Apple with Samsung with the quarter people are holding to buy iPhone for iPhone 5s .
    To be fair , please compare the quarter when each of them launch their flagship smartphone .
  • Reply 7 of 61
    gwmacgwmac Posts: 1,796member


    I remember reading that there are around 800 carriers around the world and Apple is selling the iPhone on 100 of them and Samsung is selling on all 800. Now granted most of the remaining 700 are not as big as the 2 famous ones of China Mobile and DoCoMo. But this still leaves Apple with tremendous growth potential. Samsung have already grown about as much as they can since they are selling on every carrier right now and have been for a while.


     


    It appears APple is about to make 2 game changing moves. The first is to release a more affordable iPhone to help them compete better with a much larger market. The second move might be to use the Qualcomm front end RF360 solution which would immediately allow them to be used on all the 700 carriers not served now whether they make a contract with the company or not. If those 2 things come to pass in a few months I can see Apple climbing way above 53% again. 

  • Reply 8 of 61

    Quote:

    Originally Posted by crazy_mac_lover View Post



    It is unfair to compare Apple with Samsung with the quarter people are holding to buy iPhone for iPhone 5s .

    To be fair , please compare the quarter when each of them launch their flagship smartphone .


    That also wouldn't work very well.


     


    Keep in mind, although the Galaxy S4 launched in Q2, some of the different variants have only launched in Q3. Galaxy S4 Active/Mini/Zoom/Google Edition, the Galaxy S4 LTE Advanced model had a Q3 launch and the international version might even make it into Q4 in some regions.


     


    Don't forget there is also a new Galaxy Note III launching in Q3~Q4.

  • Reply 9 of 61
    philboogiephilboogie Posts: 7,438member
    I call 50% bullshit ¡
  • Reply 10 of 61
    chandra69chandra69 Posts: 638member


    50+53 = 103 % ?

  • Reply 11 of 61
    monstrositymonstrosity Posts: 2,202member

    Quote:

    Originally Posted by PhilBoogie View Post



    I call 50% bullshit ¡


     


    I agree 103%.

  • Reply 12 of 61
    moochmooch Posts: 112member
    Quote:
    Originally Posted by Gustav View Post

    Uhm, the headline adds up to 103% of the profits.



    That is not valid in the slightest bit. If another company has a loss, then it's zero profits, not negative profits.

     

    To use a simplified example...

    If Apple makes $5, and Samsung makes $5, and the other companies collectively lose $2, then total industry profits are $8 (5+5-2). Apple obviously has a 5/8 share of the profits (or 62.5%) and Samsung has the same. It's perfectly valid. What other alternative calculation do you think there would be?
  • Reply 13 of 61
    What smartphone industry? This is a Samsung, Apple world. Chrome OS is going to swallow the world one day though.
  • Reply 14 of 61
    If these numbers are really true, it paints a pretty ugly picture about how Apple has been just coasting along. How long has Apple been in the smartphone business? It's been doing relatively well by any standards. Yet for Samsung to just run a one-year blitz and take over the smartphone industry by storm it seems to indicate that Apple isn't even trying. Again Apple becomes the laughingstock of the smartphone industry and Wall Street. Just when Apple shareholders think they might see some light, along comes Samsung and steps all over Apple like a cockroach. Samsung made it look so easy. They're nothing and then BOOM, they drop a hammer on Apple's head in such a short time.

    Market share hardly matters, but Samsung is on the verge of taking away both market share and profit share from mighty Apple. Just a quarter ago, I thought the Apple had close to 70% of smartphone profits. You really have to wonder what's going on at Apple. Were they not even aware about Samsung chipping away at the iPhone's foundation? I realize the smartphone market is in constant flux and the release of new iPhones can easily shift the tides of profit, but just the idea of Apple getting bitch-slapped by Samsung is really unsettling. The way the news media keeps announcing this is like Apple is done for. I guess Apple's economies of scale are no match for Samsung's economies of scale. I'm not sure what Apple is saving their reserve cash for, but maybe its about time they used it to put some distance between them and Samsung.
  • Reply 15 of 61
    seankillseankill Posts: 462member

    Quote:

    Originally Posted by Constable Odo View Post



    If these numbers are really true, it paints a pretty ugly picture about how Apple has been just coasting along. How long has Apple been in the smartphone business? It's been doing relatively well by any standards. Yet for Samsung to just run a one-year blitz and take over the smartphone industry by storm it seems to indicate that Apple isn't even trying. Again Apple becomes the laughingstock of the smartphone industry and Wall Street. Just when Apple shareholders think they might see some light, along comes Samsung and steps all over Apple like a cockroach. Samsung made it look so easy. They're nothing and then BOOM, they drop a hammer on Apple's head in such a short time.



    Market share hardly matters, but Samsung is on the verge of taking away both market share and profit share from mighty Apple. Just a quarter ago, I thought the Apple had close to 70% of smartphone profits. You really have to wonder what's going on at Apple. Were they not even aware about Samsung chipping away at the iPhone's foundation? I realize the smartphone market is in constant flux and the release of new iPhones can easily shift the tides of profit, but just the idea of Apple getting bitch-slapped by Samsung is really unsettling. The way the news media keeps announcing this is like Apple is done for. I guess Apple's economies of scale are no match for Samsung's economies of scale. I'm not sure what Apple is saving their reserve cash for, but maybe its about time they used it to put some distance between them and Samsung.


     


    Wow...........


    You are comparing a down quarter for Apple and a quarter right after the S4 introduction along with the introduction of multiple other S4 models.


     


    A lot of Samsung's growth came from within the Android ecosystem, not really from Apple's.

  • Reply 16 of 61
    If these numbers are really true, it paints a pretty ugly picture about how Apple has been just coasting along. How long has Apple been in the smartphone business? It's been doing relatively well by any standards. Yet for Samsung to just run a one-year blitz and take over the smartphone industry by storm it seems to indicate that Apple isn't even trying. Again Apple becomes the laughingstock of the smartphone industry and Wall Street. Just when Apple shareholders think they might see some light, along comes Samsung and steps all over Apple like a cockroach. Samsung made it look so easy. They're nothing and then BOOM, they drop a hammer on Apple's head in such a short time.

    Market share hardly matters, but Samsung is on the verge of taking away both market share and profit share from mighty Apple. Just a quarter ago, I thought the Apple had close to 70% of smartphone profits. You really have to wonder what's going on at Apple. Were they not even aware about Samsung chipping away at the iPhone's foundation? I realize the smartphone market is in constant flux and the release of new iPhones can easily shift the tides of profit, but just the idea of Apple getting bitch-slapped by Samsung is really unsettling. The way the news media keeps announcing this is like Apple is done for. I guess Apple's economies of scale are no match for Samsung's economies of scale. I'm not sure what Apple is saving their reserve cash for, but maybe its about time they used it to put some distance between them and Samsung.

    Apple has been busy making good products. The same cant be said for Samsung. Apple is not supported by many of the top carriers in the world, most places outside of America don't have phone subsidies, and Apple is only really competing at one segment of the phone market. I think your frustration is way out of proportion to what's happening. Apple hasn't shown any indication of napping.

    It was easy to hear Steve Jobs say that Apple isn't about being the biggest or most profitable company when Apple was on a meteoric rise, but now that profit margins have dropped off, it seems that these principles are unsettling for some money-oriented people. What you see with Apple now is the result of a company not being motivated to be the biggest or most profitable company. This is what it looks like. Samsung, however, wants to be #1 in those metrics, and they won't stop until they are. I have no doubt they will be.
  • Reply 17 of 61
    ronboronbo Posts: 669member
    There's a certain amount of profits out there. If I take 53%, then the most anyone else can take is 47%. Someone isn't reporting accurately on the source material.
  • Reply 18 of 61
    People need to read the whole article. The math does indeed work out because losses from Motorola and Blackberry count as negative profit.

    53% 50% - 2% - 1% = 100%
  • Reply 19 of 61
    steven n.steven n. Posts: 1,112member
    gustav wrote: »
    Uhm, the headline adds up to 103% of the profits.

    That is not valid in the slightest bit. If another company has a loss, then it's zero profits, not negative profits.

    You are 110% correct. Yogi Berra did the numbers.
  • Reply 20 of 61
    steven n.steven n. Posts: 1,112member
    mooch wrote: »
    To use a simplified example...If Apple makes $5, and Samsung makes $5, and the other companies collectively lose $2, then total industry profits are $8 (5+5-2). Apple obviously has a 5/8 share of the profits (or 62.5%) and Samsung has the same. It's perfectly valid. What other alternative calculation do you think there would be?

    It is fully invalid to do the math this way. If Apple made $5 and Samsung made $4 and HTC, LG, Google, Sony... Combined LOST $9, Apple and Samsung did not make an indeterminate amount of the profits.

    You have to treat losses separate from profits.
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