Our regular readers know by now that Samsung and Apple are (by far) the biggest smartphone vendors in the world.
But I’m sure that most of you will be surprised to learn that Samsung and Apple have earned 99% of all profits made in the smartphone market during the first quarter of 2012. Taiwanese manufacturer HTC accounts for the remaining 1% of the total profits.
These figures, calculated by Horace Dediu at Asymco, are even more surprising given the fact that smartphone shipments grew by 47% percent, bringing revenues up by 20% and overall profits up by 52% (total profits for the first quarter have reached $14.4 billion). To sum it all up, Samsung and Apple have blown their competitors out of the water.
What about the 1%?
Before we talk about Apple’s and Samsung’s astronomical profits, let’s take the time to discuss what’s happening with the other major smartphone manufacturers. Well, Nokia’s inability to keep hold of the huge market share lead it had about four years ago have made the Finnish company all but unprofitable at this point.
Another company with disappointing results is RIM, as the Canadian manufacturer is quickly approaching market exit. Back in the Android camp, it comes as no surprise that Sony (now without the attached Ericsson branding) is struggling to lose less money. Motorola’s handsets are quite competitive, but that doesn’t seem to help the US manufacturer, which has not reported profits for a number of years now. LG is earning just about as much as it invests, a situation that the South Korean manufacturer is experiencing for a couple of years now.
HTC seems to be the only manufacturer besides Apple and Samsung that doesn’t lose money, especially if you take into consideration that HTC’s profits for the second and third quarter will most likely increase, given the commercial success of their new series of One smartphones (S, X, and V).
How do Samsung and Apple do it?
Back to the winners, the following chart shows that Samsung and Apple did not “steal” the profit of other manufacturers, but rather created new “pool of profits”:
Most of Apple’s profits (a mind blowing 73% of all profit in the market) came by demanding premiums from operators who want to carry the iPhone 4S. 250 carriers (out of an estimated 500 worldwide) have paid the premium to carry the iPhone 4S. Samsung, on the other hand, have reached their share of 26% of the market profits by offering a wide range of products that tend to various needs and price points.
But before we deem all other manufacturers as nearly bankrupt, we should bear in mind that the first quarter of 2012 has definitely marked a transitional period for the market. Expect things to change quite a bit by the end of 2012.
As always, drop us a line in the comment section below and let us know what you guys make of this story!