Monopoly: Samsung bagged 95% of all Android profits in Q1

by: AA StaffMay 17, 2013

Samsung Logo aa 600px 2

In a world crowded by so many mobile device manufacturers, you’d think that the profit pie would be shared somewhat proportionally between participants. That’s not the case however. A recent reports shows  that, in the first quarter of 2013, Samsung managed to bag around 95 percent of all profits made on Android.

The figure may be unbelievable to some, but taking in consideration that, during the same period of the last year, Samsung accounted for 90 percent of all smartphone profits, this is merely an incremental increase.

But how does a company as Samsung manage to crush its competition so badly?

There is no competitor

The Seoul-based company sells many expensive, high-margin products, such as the Galaxy S4, the Galaxy Note 2, or the Galaxy Camera, but it seems that people opt for quality and tend to remain loyal to a prestigious brand. In addition to the top liners, Samsung carpet-bombs the market with a device for every taste and budget.

Some other contributing factors are Samsung’s impressive manufacturing capability, which allows it to keep building costs to a minimum, the massive and well executed marketing campaigns, and the excellent relationships that the Koreans have with carriers from all over the world.

But an equally important contributor to Samsung’s monopolization of the Android profits is the strategy adopted by the competition. While HTC tried to basically follow the same path by releasing attractive and pricy smartphones like the One, some other manufacturers prefer to go at a loss, in an attempt to build market presence and mind share.

For instance, LG partnering with Google to sell a fantastic phone at an amazing price has not done wonders for the balance sheet, but it succeeded in gave some much needed sheen to LG’s name. Still, with a phone that good, and with some other impressive devices created in-house, LG took home a mere 3% of the global Android profit share in the first quarter of the year.

In pure numbers, the total operating profit of the smartphone industry for Q1 2013 was estimated to reach $5.3 billion, from which Samsung claimed $5.1 billion. LG’s strategy has gained the company a little over $100 million, while the remaining was split between several other manufacturers.

Samsung’s power over Android has been demonstrated time and again, but the future may bring it even more clout and financial domination. Even Google chose to exclusively sell an unlocked version of the Galaxy S4 online after partnering twice with Samsung for older Nexus generations, which is a trust no other company has ever gained. And maybe this trust will bring more perks for Samsung, like early access to Android updates, which should give the company another advantage against its competitors.

  • MasterMuffin

    LG got more than HTC? Wow HTC ia doing bad! O.o

    • alex

      Reviewers trying to save them.. All media bias.. In the real world HTC is doing nothing..

      • OMGgary

        Yes, I’ve noticed the way that tech websites have been trying to hype up HTC. Too much damage done by the company to its own image at this stage, something which isn’t being improved by the arrogant pretence of elitism in its most recent campaign. You don’t get back out of the gutter by donning a top hat, putting on a snooty accent and telling people you’re Lord Haughty.

        • quietly defective

          Very true, gsm arena went as far as calling the One button issues minor, just today.

      • amine ELouakil

        lol Media bias? Think again, HTC doesn’t have the ressources nor the money that Samsung have, Samsung sponsers tech websites and they don’t even hide it and you think that they are favoring HTC, that’s some nonsense right there.

        • simpleas

          Lol no money and the products got issues. .GL HTC.

          • amine ELouakil

            Nah they’ll be fine, what they need is to release a global butterfly J with a 5,3″ or more display a sort of fablet if you may say and a proper tablet before holidays season, if they can keep the momuntum without dellueting their new found brand they should be fine

      • urbanpitch

        Yeah, I still don’t see how a metal body makes it an ‘obvious choice’. If another phone has a big screen, does all the same things and is fast as well, how is a removable battery or SD card slot that you can access easily a bad thing? I thought people were bitching at apple for not having thing those features?
        And can we talk about senseui? I don’t know how its better than touchwiz (I’m not saying touchwiz is great either) but damn, HTC ruined the One with that ui.

        • Lil bit

          They both ruined the ui, thanx God for Xperia Z with its clean virgin ui. Sense and tw both reminds me of STDs, esp tw has a sickly bloat to it. Sense could be acceptable without blinkfeed, but then again HTCs quality will never be acceptable, at least Samsung has great quality and service.

  • Stranger from a far coast

    The above article is why people look at specs and the extra hardware capabilities (external sd + removable batt)

    We should all be proud of this figure. Only sheeps are remaining at apple which does not have the above said features.

  • Abdullah

    Samsung haters… Where aree yoooouuuu ???

    • amine ELouakil

      I guess their 900% bigger marketing budget than any other Android OEM is paying off, good for them

  • tomn1ce

    HTC puts out nice phones but for some reason they find a way to cripple the device. Look at the DNA on vzw the only option is a 16GB with no room for expansion and a tiny battery.

    Motorola would only release a high end phone on vzw. If they would release high end phone on all the carriers they would be doing a lot better. Hopefully Google will turn Motorola around and make it a contender. They need to make high end phones for the top 4 carriers and advertise them as they advertised the OG Droid. This time around they should show people what the phone is capable of doing, instead of blowing up walls and fighting cyborgs like in their last series of droid razr commercials. I walk into tmobile stores and I don’t see one Motorola device.

    I’m not sure why LG is not impacting the market a bit more. They have put out nice high end device in the past year. At the same time they have cripple their lower end models by not including enough internal memory and RAM. While Samsung make a low end device with 8/16GB of internal storage and 1GB RAM. LG put in their lower end device 4/8GB of internal storage and 512/768MB. It also seems that they are not advertising as much as they need to. I won’t point out their lack of OS updates that I keep hearing about here and there to their device because the mainstream consumers are not into updates and/or don’t know that the OS is updated from time to time or just don’t care about the latest version of the OS as we do.

    • Genius Thoughts Maker

      No wonder than no one liked your comment like others

      The ideal phrase is that which is short and to the point
      Brevity is the soul of wit

  • How does one go from “samsung and apple got 90% of smartphone profits in Q1 2012” – the actual title of the linked article, to “Samsung accounted for 90 percent of all smartphone profits” – the text in the article above. This is just bad journalism.

  • john

    LG Optimus GJ= Lucky Goldstar Optimus Good Job.
    For those who don’t know, LG is a result from Lucky and Goldstar company merger.

  • coolforce

    how can they stamp dat LG logo on girls’ chest ? o_O
    lucky stamp