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High Sales Volume Does Not Translate into High Operating Profit in Smartphone Industry
Sales Vs. Profit
High Sales Volume Does Not Translate into High Operating Profit in Smartphone Industry
  • By Michael Herh
  • November 7, 2016, 02:30
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As of Q3 this year, the majority of smartphone profits are monopolized by Apple’s iPhones based on the iOS operating system while the majority of phones are based on Google's Android operating system.
As of Q3 this year, the majority of smartphone profits are monopolized by Apple’s iPhones based on the iOS operating system while the majority of phones are based on Google's Android operating system.

 

Among the smartphones shipped in the third quarter of this year, the majority of phones were based on Google's Android operating system. But it turned out that profits were virtually monopolized by Apple’s iPhones based on the iOS operating system.

According to Strategy Analytics (SA), a market research firm on November 4, 328.6 million units or 87.5 percent of smartphones shipped in the third quarter of this year, were based on Google's Android operating system. The number of Android phones shipped in the third quarter increased 10.3% from the same period last year.

On the other hand, Apple shipped only 45.5 million iPhone units. Compared to the same period last year, iPhone shipments fell 5.2 percent. Accordingly, the proportion of smartphones based on the iOS operating system dropped to 12.1% from 13.6% in the same period last year. In addition, the proportions of BlackBerry, Microsoft and Samsung's operating system, Taizen were almost zero, CNBC said.

Meanwhile, Tim Long, an analyst at BMO Capital Markets, estimated that Apple accounted for 103.6 percent of the smartphone industry's operating profit in the third quarter.

On the other hand, Samsung's operating profit in the smartphone sector accounted for only 0.9 percent, Long said. Apple's operating profit exceeded 100 percent as LG and HTC suffered from operating loss, Long explained. Samsung lost some of its market share to Apple and Chinese smartphone makers in the third quarter due to a botched recall of Galaxy Note 7 following a series of fires on the smartphone. Samsung's market share stood at 21.7 percent while that of Apple, 13.2 percent and that of Huawei, 9.7 percent in the third quarter.

Analyst Long predicted that smartphone shipments will grow 2.6 percent annually by 2019. "Emerging markets will grow at an average annual rate of 4 percent, taking the lead in the smartphone market’s growth," Long said. "On the other hand, advanced markets will shrink one percent per year on average."