Find: Apple has 75% of phone profit, Samsung the rest

Ars Technica

Samsung and Apple may be duking it out for the number one slot in smartphone sales (particularly due to the collapse of Nokia), but the two leaders have an astonishing combined 99 percent of global handset profits for Q1 2012. Of that, Apple took in 73 percent of global handset profits, despite having just 9 percent of global handset market share, according to new quarterly analysis from Canaccord.

That’s just one of the fascinating details that analysts have unearthed in the season of quarterly reports. According to IDC, in Q1 2012 Samsung shipped almost four times as many units—42.2 million—as it did in Q1 2011 (11.5 million). But while Apple may have shipped fewer units (after all, the company has less than 10 percent of global smartphone market share), Juniper Research reports that Apple’s Q1 2012 iPhone revenue was $22.7 billion, about a third higher than Samsung’s $16.7 billion from its entire mobile division. Naturally, profits always trump units shipped.

"Apple and Samsung compete on the high-end, where the money is made, and unlike some of their competitors, both don’t need to cut device prices to attain sufficient volume, which is what happened recently with Nokia and the Lumia," wrote Dexter Thillien, a mobile industry analyst at IHS Global Insight, in an e-mail to Ars on Thursday.

"It’s also worth bearing in mind that Google has revenues of around $2.5 billion a year from Android (overall is around $40 billion), and even though their business model is completely different, it further highlights the importance of hardware compared to software."

Other analysts have estimated that global smartphone shipments are set to rise significantly, and as such, will account for a bump in profits across the board.

In a recent report, IHS Global Insight also said that global smartphone shipments are poised to rise by 35 percent, and that "the smartphone segment will be single-handedly responsible for the overall cellphone business expansion of 7.4 percent in 2012. Next year, smartphone shipments will rise to account for more than half of all cellphones for the first time, at 52 percent, up from 43.5 percent in 2012."

"Smartphones now represent around 75 percent of postpaid sales in developed markets, and an increasing share in developing markets, with the proliferation of sub-$100 devices by Chinese vendors, with China leading the way in that market," Thillien added.

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