Analyst: Apple, Samsung Own the Smartphone Market

| Apple Stock Watch

Apple and Samsung combined control 99 percent of the smartphone market’s profits, and that isn’t likely to change any time soon. Canaccord Genuity’s Michael Walkley said his research backs that up, and that some 73 percent of those profits went just to Apple.

Apple rakes in 73% of smartphone profitsApple rakes in 73% of smartphone profits

“With strong iPhone market share during Q1/12 combined with Samsung’s strong smartphone share gains including increased sales of higher margin products such as Galaxy Note, we estimate Apple and Samsung captured a remarkable 99 percent of Q1/12 handset industry profits,” Mr. Walkley said. “Apple generated 73 percent share of estimated Q1/12 handset industry operating profits with only 9.0 percent global handset market share.”

Apple reported selling 35.1 million iPhones during its second fiscal quarter, up 88 percent year-over-year. Those iPhone sales helped boost the company’s revenue up to US$39.2 billion with earnings of $11.6 billion.

iSuppli recently reported that Samsung’s total cellphone sales topped Nokia for the first time, pushing Nokia out of its spot as the world’s largest phone supplier. Apple ranked third worldwide, which was a commendable spot since the company makes only smartphones and can’t boost total sales figures with lower end feature phones like Samsung and Nokia.

While Apple and Samsung may control the smartphone industry’s profits now, they are facing some competition — at least short term. “While we believe Apple and Samsung will maintain strong smartphone share during Q2/12, we believe new product offerings from OEMs such as Nokia, HTC, LG, and Huawei should result in these OEMs reclaiming modest share gains ahead of the Samsung Galaxy S III and iPhone 5 product refreshes,” Mr. Walkley said.

Mr. Walkley recently raised his target price for Apple’s stock from $740 to $775, and has a “Buy” rating to go along with his higher target price. Apple is currently trading at $581.21, down 0.92 (0.16%).

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