Analyst: Apple, Samsung Own Smartphone Industry Profit

| Apple Stock Watch

Apple and Samsung have once again turned it up to 11 to control all of the smartphone industry profit. According to Canaccord Genuity analyst Michael Walkley, the two companies took more than 100 percent of the market's profit for all of 2012.

Apple and Samsung take more than all the smartphone profitsApple and Samsung take more than all the smartphone profits

"We estimate Apple and Samsung combined to capture a remarkable 101 percent of Q4/12 handset industry profits and an astounding 103 percent of C2012 industry profits, as several competitors such as BlackBerry, Nokia, and Motorola Mobility posted operating losses during the year," Mr. Walkley said.

It's no secret that Apple's iPhone and Samsung's Android-based smartphones are the among the most popular mobile devices for consumers, and it seems that the two companies have accounted for almost all of the profits in the market for months. In May 2012, Mr. Walkley estimated Apple and Samsung controlled 99 percent of the smartphone market profit, leaving little for their competitors to fight over.

At the time, he also noted that despite owning about 9 percent of the global smartphone market, Apple brought in 73 percent of the worldwide handset market, which also includes feature phones.

Apple reported selling 47.8 million iPhones during its first fiscal quarter for 2013, and as of January had sold more than half a billion iOS devices, which includes iPhones, iPads and the iPod touch.

The better than 100 percent figure Mr. Walkley gave Apple and Samsung comes at the expense of other smartphone makers. Hitting 103 percent took into account the losses companies such as Motorola, Sony Ericsson, and BlackBerry (formerly RIM) suffered.

Mr. Walkley doesn't see Apple and Samsung's market control ending soon. "Given the current competitive dynamics, we believe Apple and Samsung will maintain dominant value share during Q1/13 with share gains for Samsung versus Apple expected in Q1/13," he said.

Apple is currently trading at US$455.90, down 1.85 (0.42%).

Comments

John Molloy

“We estimate Apple and Samsung combined to capture a remarkable 101 percent of Q4/12 handset industry profits and an astounding 103 percent of C2012 industry profits”

Hmmm. Estimates over 100%? Either someone is lying about their figures or these analysts can’t do math.

geoduck

Agreed. This is just hyperbole and statistics, which is right up there with lies and damned lies. Only marketers will quote over 100% and marketers aren’t to be trusted.

RonMacGuy

Wow, give me a break guys, and actually try reading the article.

“The better than 100 percent figure Mr. Walkley gave Apple and Samsung comes at the expense of other smartphone makers. Hitting 103 percent took into account the losses companies such as Motorola, Sony Ericsson, and BlackBerry (formerly RIM) suffered.”

When talking profits, two manufacturers CAN actually be making more than 100% of the profits when others are losing money.  Now, if it was revenue instead of profit, then I would be questioning the legitimacy.  But given where “performers” like Motorola, Sony, Blackberry are volume-wise, it is very likely that they are losing money with every smartphone that they are selling.

John Molloy

I have to be honest in that I’d prefer if Samsung were just making numbers up to go along with the rest of their working methods. Eating into others profits is all well and good but that was pretty obvious anyway.

geoduck

RonMacGuy:
I get what you’re saying but I don’t buy it. There is only X amount of dollars to be made.  If other companies lost money that’s their mistake but it has no impact on the total number of dollars available. It does not magically pull more money out of the ether. There is still only X dollars in the pot. It just means that RIM et.al got less.

dwallin

You’re wrong (Dr Brewster) because RIM et al’s losses add to the available pot provided by the consumer. In effect RIM et al are paying money to Apple and Samsung to be in the game.

RonMacGuy

Geoduck, I’m not exactly following your logic.  Again, if you were talking revenue where there are no negative numbers (unless you could product returns, but the assumption is that you would never have more returned than sold initially) then I would agree - you cannot pull money out of the ether.

Look at a simple example - I do a lot of product portfolio analysis.  Company X has 3 product lines.  2 are cash cows (i.e. a lot of profit with little to no new development costs), and 1 is a brand new product that is being developed with a ton of engineering cost and little to no sales.  So, CC1 makes $1M of profit last quarter, CC2 makes $2M profit, and NP1 has a $1M loss.  Total profit of the company is $2M.  You can honestly say that CC2 made 100% of the profit ($2M/$2M), CC1 made 50% of the profit ($1M/$2M), and NP1 lost 50% of the profit.  Just basic math, and how you define profit.  I don’t think it is misleading.

russell

There’s a lot of engineers don’t seem to understand accounting.  I guess it balances the lots of accountants who don’t understand engineering.

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