Apple makes 57% of all smartphone profits

When it comes to profits, there’s long been only one real winner in the smartphone industry: Apple.

At least that’s what used to be the case, until Samsung joned the party. In Q4 of 2012 Apple and Samsung made 103% in the smartphone industry, with 72% of that going to Apple. How can they make over 100% I hear you asking? Well basically because everyone else made a loss!

And that 72% of profits came from just 22% of unit sales! Nearly three quarters of all profits from just over a fitth of handsets. However things have changed in Q1 of 2013. The percentage has shrunk quite dramatically to a still very resepectable 57%, with Samsung again making up the remainder.

Notice that this time the total does actually equal 100%. LG made approximatly 1% of profits which was wiped out by Motorola’s losses, with the rest just about breaking even.

So why has Apple’s share gone down so much? The main reason seems to be the (relative) underperformance of the iPhone 5. Although still selling well in absolute numbers, it’s making up a smaller share of Apple’s sales than the flagship iPhone usually does, with more people choosing to buy the iPhone 4 and 4s. This in turn has a negative effect on margins as the older models are less profitable. Still, it’s not too bad a problem to have, especially compared to everyone else.

The decline in profit share is also expected to continue next quarter though. The Galaxy S4 should help to increase Samsung’s profits even higher, with HTC no doubt hoping to finally see a lift with the One as well. Meanwhile a new iPhone is probably still 5-6 months away.