View Full Version : Samsung Tops Apple as the Most Profitable Handset Vendor on the Planet

07-26-2013, 11:40 AM

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 (http://bgr.com/2013/07/26/samsung-smartphone-profits-q2-2013-apple/)