Apple, Samsung control 106 percent of industry's profits

The two have been benefiting from losses at rivals like Nokia and Motorola, Canaccord Genuity says, and that trend should continue.

Sorry, Nokia Lumia. Apple and Samsung are still generating most profits in the handset industry.
Controlling all of the mobile market's profits doesn't appear to be enough for Apple and Samsung anymore. Now they're actually generating more than 100 percent of the industry's earnings -- 106 percent, to be precise -- according to a report from Canaccord Genuity.

That may seem impossible, but it's largely because rivals -- like Research In Motion, Nokia, and Motorola -- posted operating losses during the September quarter, the firm said.

"With Samsung extending its overall smartphone and Android market share combined with Apple's strength in high-end smartphones, competing smartphone [original equipment manufacturers] continued to struggle to compete with these dominant smartphone OEMs," Canaccord analyst T. Michael Walkley noted today.

It's actually the second quarter in a row that the two companies captured greater than 100 percent of the industry's profits, Walkley added. In the second quarter, Apple and Samsung held 108 percent share .

Walkley estimates that Apple captured 59 percent of the industry's operating profits in the calendar third quarter, with only 6.3 percent of global handset unit sales and 15.4 percent of smartphone unit sales.

Samsung, meanwhile, controlled 47 percent of the profits, up from 37 percent in the second quarter. It held 25.6 percent of the global handset unit market share in the third quarter, up from 25.3 percent in the second quarter, in part because of strong Galaxy S3 sales. Walkley expects Samsung to maintain its leading unit market share position during the fourth quarter and beyond, continuing to supplant longtime leader Nokia.

The two companies' dominance should continue in the current quarter, Walkley said, with Apple likely to take some share from Samsung during the period because of strong global demand for the iPhone 5.

The numbers continue to paint a dismal picture for the handset industry at large, with barely anyone being able to make money aside from Apple and Samsung. The giants continue to dominate and squeeze rivals like Motorola while low-cost handset makers like ZTE are applying pressure on the low end.

 

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