Apple and Samsung have a lot going for them; so much, in fact, that the two dueling companies now essentially own the mobile phone market in terms of profits.
According to new data, Apple and Samsung have only left one puny percent of profits for the mobile phone market to one other company. That other company is HTC. The rest of the other popular handsets makers like Nokia, RIM and Sony did not have a slice of the profits for the market as they have actually lost money.
“Of the vendors tracked (public companies who report mobile phone divisional performance), Apple obtained 73% of operating profits, Samsung 26% and HTC 1%,” Asymco analyst Horace Dediu worte in a post on the site of the research firm. That means that Apple owns almost three quarters of the mobile phone market by profit while Samsung took home more than a quarter of the pie.
Look at the graph below. Apple came out of nowhere from 2007 when it launched the iPhone to steadily increase its share in profit of the mobile market. Although Samsung’s share has been fairly consistent over the years from 2007, except for a period starting from the second quarter of 2008 lasting to the last quarter of the same year when its profit shrunk considerably, its performance is to be envied.
Why should it be envied by other manufacturers of mobile phones? Take for example Sony Ericsson (now only Sony, by the way, as the Japanese firm bought Ericsson’s stake of the joint venture). It had a profit from Q2 2007 to Q2 2008 when its profit became nonexistent. It briefly posted profit from Q4 2009 (a slim one at that) to Q2 2011. RIM has completely decline to nothingness in Q4 2011. Nokia, which had a dominant share of about 60 percent at the start of the graph, has also declined to nothingness. LG only managed to have a profit until Q4 2009. HTC has also declined.
It’s a booming market too, according to Dediu. “The absolute profits picture below shows how the industry actually expanded available profits by quite a lot. Two years ago the vendors generated profits of $5.3 billion in the first quarter and last quarter they generated $14.4 billion,” he wrote.
So, will this continue into the future? Will Apple and Samsung be the only companies to come out of this race making the market essentially just a duopoly? Tell us what you think on the comments below.