95 Percent of Profits in Smartphone Industry Belong to Apple and Samsung
Based on a study conducted by Canaccord Genuity, it appears that the smartphone market has come down to two big players: Samsung and Apple. From a profitability perspective, both are the only ones that matter. Combined, Samsung and Apple accounted for a huge 95 percent of the smartphone industry’s profit figures during Q4 2011. In the same period, iPhone’s maker accounted for 80 percent of the profit. For any business, profitability is a key measuring indicator and it holds a significant sway on how companies make business decisions. For example, in recent months HTC experienced a sizable profitability setback causing the Taiwanese company to radically change the way it designs and releases products. The One series smartphones are the result of this rethinking process.
For the rest of the industry, Canaccord Genuity’s figures don’t paint a happy, pretty picture. Most of the smartphone industry relies on Google’s Android OS and they can’t easily set themselves apart from the competition. Nevertheless, Nokia and Research in Motion continue to see decline in market share despite the fact that they’re using different operating systems.
Apple, with its powerful iPhone brand and much-loved proprietary iOS operating system, has almost not trouble attracting more sales. In Q1 2012, Cupertino continued to consolidate its domination in the US market and the iPhone convincingly outsold all other handsets combined at Sprint Nextel and AT&T. On the other hand, Samsung’s Galaxy smartphones offer consumers a wide price range, from the very affordable Galaxy Y to the super-fast Galaxy S2 Blaze 4G.