Samsung Overtakes Apple to Become the Most Profitable Handset Maker in the World

UK: Unlocked Samsung Galaxy S4 Active now available for 495 GBP

A new report shows that Korean tech giant, Samsung has edged ahead of Apple in the handset market. Strategy Analytics’ Neil Mawston gave the gist of the firm’s new report in a blog post. Samsung posted $5.2 billion in handset profits in Q2 2013, eclipsing Apple’s $4.6 billion. Mawston chalks Samsung’s growing profits up to “strong volumes, high wholesale prices and tight cost controls”.

The entire report can be found here. Mawston’s analysis is below:

According to the latest research from Strategy Analytics’ Wireless Device Strategies (WDS) service, Samsung became the world’s most profitable handset vendor in Q2 2013. Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.

The term “handset” includes all smartphones and feature phones combined.

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. 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.

Apple’s reign as the world’s most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013. Apple’s profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. 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.

[Via: Strategy Analytics]

  • PeterSteinbeck

    With so many different models covering every price point – there are no surprises here.

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