Apple & Samsung take massive 109% of mobile industry profits while competitors lose money
The mobile market continues to be a two-horse race for profitability between Apple and Samsung, with the two rivals commanding 109 percent of profits -- a number made possible because its competitors are actually losing money in the smartphone space.
The latest data from Canaccord Genuity, shared with AppleInsider by analyst T. Michael Walkley on Thursday, estimates that Apple took 56 percent of the operating profits for feature phones and smartphones in the third quarter of calendar 2013. Coming in close second was Samsung, which took 53 percent of industry profits.
In contrast, all of the competition lost money, with the exception of Sony, which broke even during the quarter. The biggest loser was struggling BlackBerry, which represented a negative 4 percent of industry profits, followed closely by Google-owned Motorola, taking negative 3 percent.
Nokia, LG and HTC were all about even with one another, each representing negative 1 percent of mobile profits, according to Canaccord Genuity.
Walkley noted that the share controlled by Apple and Samsung is likely lower when the profits of Chinese vendors such as Lenovo, ZTE, Huawei and Coolpad are included. However, Chinese manufacturer profitability data is not available, and could not be included in the industry-wide comparison.
Apple actually saw its share of profits increase from 53 percent in the second quarter to 56 percent in the third quarter, despite the fact that the company was transitioning to the launch of the iPhone 5s and iPhone 5c late in the quarter. Walkley said Apple's greater share of profits came to slightly higher sequential iPhone unit sales, as well as more pronounced losses from BlackBerry and HTC.
"Given a full quarter of iPhone 5s/5c sales, we anticipate very strong operating profit share for Apple during the holiday quarter," the analyst wrote. "Further, we believe Apple's value share of the handset market is even higher than our estimates... considering Apple's dominant share of the tablet market, as some Android OEMs include tablet sales in reported smart device sales and profits."
In fact, when tablets, notebooks and other mobile devices are included, Apple earned more than Samsung, LG, Nokia, Huawei, Lenovo and Motorola's mobile divisions combined, according to separate data released last month by Strategy Analytics.
Concentrating on phones alone, Apple and Samsung are estimated to have accounted for more than 100 percent of industry profits for some time now. Prior to Thursday's data, the most recent figures from July showed the rival companies accounting for 103 percent of industry profits.
The latest data from Canaccord Genuity, shared with AppleInsider by analyst T. Michael Walkley on Thursday, estimates that Apple took 56 percent of the operating profits for feature phones and smartphones in the third quarter of calendar 2013. Coming in close second was Samsung, which took 53 percent of industry profits.
In contrast, all of the competition lost money, with the exception of Sony, which broke even during the quarter. The biggest loser was struggling BlackBerry, which represented a negative 4 percent of industry profits, followed closely by Google-owned Motorola, taking negative 3 percent.
Nokia, LG and HTC were all about even with one another, each representing negative 1 percent of mobile profits, according to Canaccord Genuity.
Walkley noted that the share controlled by Apple and Samsung is likely lower when the profits of Chinese vendors such as Lenovo, ZTE, Huawei and Coolpad are included. However, Chinese manufacturer profitability data is not available, and could not be included in the industry-wide comparison.
Apple actually saw its share of profits increase from 53 percent in the second quarter to 56 percent in the third quarter, despite the fact that the company was transitioning to the launch of the iPhone 5s and iPhone 5c late in the quarter. Walkley said Apple's greater share of profits came to slightly higher sequential iPhone unit sales, as well as more pronounced losses from BlackBerry and HTC.
"Given a full quarter of iPhone 5s/5c sales, we anticipate very strong operating profit share for Apple during the holiday quarter," the analyst wrote. "Further, we believe Apple's value share of the handset market is even higher than our estimates... considering Apple's dominant share of the tablet market, as some Android OEMs include tablet sales in reported smart device sales and profits."
In fact, when tablets, notebooks and other mobile devices are included, Apple earned more than Samsung, LG, Nokia, Huawei, Lenovo and Motorola's mobile divisions combined, according to separate data released last month by Strategy Analytics.
Concentrating on phones alone, Apple and Samsung are estimated to have accounted for more than 100 percent of industry profits for some time now. Prior to Thursday's data, the most recent figures from July showed the rival companies accounting for 103 percent of industry profits.
Comments
...And all of it based on Apple's design lead. Well, according to Samesung's current legal council at least.
109%? Time to go back to stats class. It's not valid to count other companies losses as "extra" profits. There's no money to be had there - that's why they had losses. Remove them from the equation.
Indeed, it's a good thing the IRS doesn't do stats the way Canaccord Genuity does, or else businesses would be taxed on the phantom "profit" when their competitors lose money or go bankrupt.
And this was even before Apple's current HUGE quarter with its market share growth.
In the days of Windows 95, multiple vendors sold PC's.
Only Samsung is making any serious money off of Android!
109% is the new 103%.
This headline is dumb. You can't take 109% of something. Losses are not profits.
According to their website, "Canaccord Genuity is a global, full-service investment bank". Maybe this is why the global financial system is having such troubles... the banks just don't understand basic math.
109%? Time to go back to stats class. It's not valid to count other companies losses as "extra" profits. There's no money to be had there - that's why they had losses. Remove them from the equation.
I concur, a 100% of nothing is still nothing. The correct headline would be that Apple and Samsung take 100% of the industry profits.
I've got to think that 109 was bait for posts!
Once again, the big loser here is Windows Phone 2007.
Groan.
Pavlov is turning in his grave.....
According to comScore, more than 25% of all cell phones (not just smartphones) in use in the US right now are iPhones. This is 8% more share than a year ago, and 14% more than two years ago. This coming year Apple's share will pass all Android phones combined in the US. So I'm not sure exactly how Apple is losing in the market share war.
Perhaps worth remembering that Steve Jobs' hopes for the iPhone, at least in public statements, were very much more modest (and Microsoft's very much more significant in Steve Balmer's public statements). Apple's iPhone market share vastly exceeds Steve Jobs' stated hopes for it.
Perhaps worth remembering that Steve Jobs' hopes for the iPhone, at least in public statements, were very much more modest (and Microsoft's very much more significant in Steve Balmer's public statements). Apple's iPhone market share vastly exceeds Steve Jobs' stated hopes for it.
You know, I hear folks mention this modest-1% thing time and time again, and when I went back and listened to the keynote earlier this year, I heard it differently.
Jobs said their goal was to have one percent of the market in its first year. Nowhere can I find a statement that one percent would be fine indefinitely... in fact, I thought he alluded to growing that one percent significantly in the future.
Basically, it means that Apple and Samsung are producing more profit than the market would expect and those not making money are losing more than they should be. That voids difference is the 9%
It's weird, I know..
I've got to think that 109 was bait for posts!
Agreed, the 103% of profits article a few months back lit up the comment section with accountants beating their chests. Looks like AI wants to repeat that.
To all those saying no 109%.. thats not how the market usually looks at it. They generally assume each competitor with a % of market profits.. when you have dominating competitors, and losses form the others are considered taken by those with the profit. Think about it this way.. 4 competitors, all things being equal, would normally take 25% each. If one is in the negative, you can't ignore in the numbers, it has to be accounted for, and in the overall scheme that negative is SOMEONES positive. In this case, Samsung and Apple.
Basically, it means that Apple and Samsung are producing more profit than the market would expect and those not making money are losing more than they should be. That voids difference is the 9%
It's weird, I know..
More simply, think gross profit and net profit... Apple and Samsung are 109% of NET SmartPhone Market profit, or 100% of the Gross profit is made by these 2... everyone else is losing money to add up to a NET profit of 100%.
It makes more sense than saying:
There are 100Billion Samolians made in the smart phone market. Of those, 109Billion are made by Apple and Samsung. The remaining -9Billion of 'profit' are all the rest combined.