Samsung Tops Apple as the Most Profitable Handset Vendor on the Planet

[dgstorm]

Someone finally came along and made an iPhone killer, and that someone was Samsung. Although Apple is still the most profitable consumer electronics vendor in the world, Samsung just surpassed them in one key metric. In the second quarter, Samsung became the most profitable handset vendor in the world. Bolstered by the launch of the Galaxy S4, Samsung reached an operating profit of $5.2 Billion with their handset division, while Apple only reached a total profit of $4.6 Billion for the iPhone line during the second quarter. Here's a quote with more of the details,

The result, as Strategy Analytics notes, is a changing of the guard.

“We estimate Samsung’s operating profit for its handset division stood at US$5.2 billion in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion,” Strategy Analytics analyst Neil Shah said. ”With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry’s largest and most profitable vendor.”

Shah’s colleague and Strategy Analytics’ executive director Neil Mawtson added that Apple’s reign as the world’s most profitable handset vendor lasted nearly four years, from the third quarter in 2009 though the end of the first quarter this year.

“Apple’s profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals,” Mawtson noted. ”Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.”

It's an especially impressive victory considering that sales of the SGS4 were less than expected. Of course, now that there is a saturation of smartphones out in the developed nations, it will be interesting to see who becomes king of the emerging third world markets. Luckily for Samsung they have a headstart in some markets and are very good at offering several different versions of their devices to fit different budgets.

Source: BGR

 

[jspradling7]

When are the Thermonuclear's supposed to go off? : )

 

[hradek422]

Don't get me wrong, I am a big fan of Samsung, and hate the iPhone, but to say that Samsung went and made an iPhone killer is something that I disagree with. The iPhone killer has already been made. It's the iPhone. Apple is killing themselves by not being innovative anymore. They aren't releasing enough new things to make it worth upgrading. And honestly, it's something Samsung is dealing with as well, just obviously not as much. I'm on the S3, and I won't get the S4, because it's just not worth it to me. If both companies continue how they are, then before long, the iPhone will be a thing of the past, and someone will be "making a Galaxy Killer." That's just my opinion though.

 

[Asgard]

Don't get me wrong, I am a big fan of Samsung, and hate the iPhone, but to say that Samsung went and made an iPhone killer is something that I disagree with. The iPhone killer has already been made. It's the iPhone. Apple is killing themselves by not being innovative anymore. They aren't releasing enough new things to make it worth upgrading. And honestly, it's something Samsung is dealing with as well, just obviously not as much. I'm on the S3, and I won't get the S4, because it's just not worth it to me. If both companies continue how they are, then before long, the iPhone will be a thing of the past, and someone will be "making a Galaxy Killer." That's just my opinion though.

Yeah, it's one of the problems I have with android manufacturers, don't try to 1-up apple, don't try to make an iphone/ipad killer. That just keeps us in a circle of doing the same things just a little bigger.
To me it's better if they go and do some new and interesting things instead of just saying: "We are better than apple"

 

[dgstorm]

I agree with both of you, and if you think about it, that is why the Galaxy Series won. It was because Samsung chose to create new experiences with software on their phone that appealed to a wider consumer audience. They innovated the experience, rather than the aesthetics. That is why it really was the iPhone killer, because it no longer competed or even cared what Apple was doing. It just did its own thing. In other words, Samsung lead instead of following. In the end they created an iPhone killer incidentally.

Also, you are probably right. Eventually there may be a Samsung Galaxy killer too. If another manufacturer can come along and create a device that offers a unique experience for consumers, we will gladly flock to the new shiny thing and forget all about the last one. We are a fickle lot.

 

[pc747]

I cant help to think the publicity Samsung got last year during the apple lawsuits helped. Apple basically push Samsung on to news segments and front page news over the lawsuits and what did most news do they took the galaxy devices and showed how they looked like the iphone. So those who went into best buy and carrier stores looking at phones saw the iphone then the bigger galaxy devices. I think apple will continue to do fine. As far as android it is a continuing cycle for top dog. Motorola with the droid, htc with the evo like devices, and now sammy with the galaxy lines. I really am hoping motorola once they get through the pipeline can be top dog again. But for right now I think it is going to be a slugfest between htc and sammy if htc can keep putting out devices like the htc one. The one was htc's desperation device and it landed. Motorola droid was motorolas desperate device and though im glad google bought them I almost feel like they removed that fear of desperation, something I think mototola needs in order to push them into making game changing devices vs what they been putting out the past few years which is just satisfaction with putting out a device.

Sent from my SAMSUNG-SGH-I317 using Tapatalk 2

 

[WestOkid]

As much as I love my Samsung devices, this is just fools gold. That fact is that Apple is always weak in the second and third quarter becuase people wait for the new iPhone in the fall. This a pattern not a trend.

 

[kodiak799]

Yeah, the only thing special Samsung did was match Apple's advertising budget.

It does tell me they are getting similar efficiency/scale as Apple. With so many other OEM's struggling to make a profit it seems like you need massive volume to get scale to make money.

But I have no idea how you don't make money charging $600 for a $200 phone.

 

[xtor]

Good to hear, now if moto could pull it off, thing's would be grand.

sent from a note yee (2)

 

[xeene]

As much as I love my Samsung devices, this is just fools gold. That fact is that Apple is always weak in the second and third quarter becuase people wait for the new iPhone in the fall. This a pattern not a trend.

apple has been weak since september of last year, so that's almost 4 quarters in a row. their phone has been dethroned couple years ago as top dog of smartphones, now their tablets are starting to play catch-up as well. take away their bread and butter and watch stock price decline from 700s down to 400s.

 

[Rhino94]

Apple has nothing anymore but their software. They aren't coming up with the ideas anymore the android manufacturers are.