Apple and Samsung lead the smartphone market by far. This is no secret and even the 3rd biggest smartphone manufacturer is struggling to stay alive. Most users tend to live their lives with no knowledge of this, but these numbers could be signaling the destruction of smartphone technology as we know it. It’s time to wake up!
The latest Canaccord study shows the Q1 2014 Global smartphone operating profit share. Meaning, how much of the industry’s cash each company took. These graphs are very interesting to look at, but more than anything they are alarming. Did you know Samsung and Apple hold 106% of all smartphone operating profits in Q1?
Trust me when I tell you that 106% is no typo. This number is possible because Canaccord takes into account other companies’ negative numbers (losses). Which, by the way, all other manufacturers are losing money. None of them are making profits, or even breaking even in Q1 2014.
Of course, there is a difference between sales and profits. This chart is all about the money, not about how many devices are out there. This makes the graph a bit more impressive. Even though Android has much more reach than iOS, Apple is making all the money!
What will happen if this continues?
Regardless of the industry, a duopoly is never healthy. Especially not one that yields these numbers. Apple and Samsung have become dangerous for the industry and could pose a threat to the future of mobile technology.
It’s obvious no manufacturer can live for too long without making profits. A point will come when some of these companies will simply have to drop the towel and find a market where they can actually make money.
Maybe not all companies will fall. Some of those at the bottom of the barrel might pick up more users than the others and finally cross that 0% line. Regardless, it’s a long way up before any of them can even touch Apple or Samsung. In short: if these statistics don’t change the mobile industry will belong to Apple and Samsung (it kind of does already). Competition will die and this will immediately harm consumers.
What can the manufacturers do to change this?
This is really a mute argument by now. Though most of the world thinks Samsung and Apple are the kings of all things mobile, they can arguably be beat in terms of device quality, design, software and innovation. This is really a matter of preference.
Many of us believe HTC phones are better-built, some believe Apple devices are elegant and simple, others think Sony devices have great design and performance. Ultimately, there are no “best brands” out there, at least not in such a general way. Samsung and Apple, like any other manufacturers, are exceeded in multiple areas.
With that said, it’s important to note there must be a difference in perception. Why do people think Apple and Samsung are “the best”?
Samsung and Apple will do nothing but continue trying to take all the customers unless the others do something. What is the problem here? It’s all about marketing!
It goes beyond manufacturing and engineering. Apple and Samsung spend millions over millions in marketing and advertising. They are in every city, magazine, newspaper, website and TV channel. Billboards surround you and there is no way to escape them.
This is why people relate to these phones, especially when they are not reading tech articles all day like you and I. This is why some people call all smartphones “iPhones” or “Galaxies”, even if they aren’t. The smaller manufacturers need to become better-known. They need to show people this industry goes beyond the two mobile giants.
Though I love HTC’s bold “Ask the internet” campaign, I believe they need more than that. They need to become visible to every single person!
Android Silver continues to be a rumor, but it’s said to be a program in which manufacturers can release Nexus-like smartphones. In a way, it seems to be the proliferation of the Google Play Edition program, except with a different label and modified rules. Some believe it will actually replace the Nexus program, which is a rather big jump.
We can’t say for sure yet, but we do know we need something better. Something for everyone. Can Android Silver give everyone a bigger chance? It all depends on how it unfolds. The Nexus program is popular for its hardware and software, but a bigger factor is its affordability. These phones are known for being powerful, yet affordable. That’s a huge drive behind its sales numbers.
If all Android Silver participants agreed to have devices at affordable prices, users would probably feel more comfortable trying new brands (to them, that is) and seeing what else is out there.
The smartphone’s faith
If things are to change, it needs to be now. There are many great devices out there and we can’t afford them fading away, along with fair competition. The fact is Apple and Samsung continue getting stronger.
Samsung Galaxy S5 sales have been outpacing the Galaxy S4 by 10%, and their tablet market has reached a new high in Q1. Samsung also holds over 71% of the smartwatch market share in Q1, all with wearables that are limited to only Samsung phones! And let’s not even mention Apple, who just can’t be beat.
All of this would be understandable if we could tell you Samsung and Apple were the best at everything, or even most things. The fact is, it’s all perception. We urge you to do your research next time you purchase a smartphone (and we know many of our readers do). Try to support the smaller guys if you find a worthy phone. It’s worrisome to see no one but Apple and Samsung making money… it’s not a good road.
Just come to Android Authority and check out our reviews! We promise you, Samsung’s devices don’t always rank higher than the other manufacturers. In fact, they rarely come out on top.