Apple, Samsung Capture All Of Industry's Smartphone Profits (zdnet.com)

Continuing to operate on razor thin margins, smartphone manufacturers other than Samsung and Apple are bleeding money. Apple accounted for 75 percent of the smartphone's profits in the second quarter this year, down from 90 percent a year ago, according to Canaccord Genuity. Samsung, which has reported strong sales thanks to its Galaxy S7 series of smartphones, accounted for more than 30 percent of the industry, the research added. ZDNet reports: While this tale could revolve around Apple vs. Samsung the larger question is this: Why would any company want to make smartphones? Let's get real. All the profits go to Apple (high end) or Samsung (high end and scale). The rest of the players in the market don't make money and get disrupted by whatever vendor is flavor of the month? Remember that Xiaomi was supposed to be the next big thing in China and elsewhere, but is now being disrupted by Oppo and Vivo. A quarter from now Oppo and Vivo will be thumped by some smartphone manufacturer we haven't heard of yet.

Comments

Stop chasing the shiny

[TWX]

So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.

Then they need to ask themselves what device accomplishes these tasks, and then start comparing extra features that cost more along with various price points.

After they've done all that, basically identified needs, wants, what's superfluous, then they're in a positon to actually make a choice.

We tend to be a bit conservative with our spending, using devices until they stop working, and in some cases doing a bit of home repair to keep them going when there are problems. I used an HTC Dream until the "A" key quit. We used Galaxy SII phones until her power button kept getting stuck where it was engaged, fixed that a couple times before having enough, and I used my SII until something failed and it no longer recognized SIM cards or that it had a WIFI chip. She didn't feel a need for more functionality than the SII so we replaced it with a Galaxy Core Prime, and I wanted durable without needing a case so I went with the Kyocera DuraForce XD. She spent around $200, I spent around $400, both a far cry from the $700 phones that are so common, and I expect these will give us many years of good service.

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

Re:Stop chasing the shiny

[jeffmflanagan]

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

Those of us that aren't locked into a fixed set of needs, find that a new phone each year or two is required to meet our new needs. We first used phones to make calls, then we started using them as pocket computers. Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.

Re:Stop chasing the shiny

[swillden]

Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.

Is this a need, or is this a want?

That question is irrelevant. If I want to have a device that does something, and I want it enough to shell out the money for it, why in the world shouldn't I?

Your whole premise is that people are somehow wrong if they want a shiny new phone every year. Who are you to tell people what they should want?

Re:Stop chasing the shiny

[jon3k]

Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.

New high end smartphone is $200 on contract in the US. That's about $17/mo to have the latest, fastest phone with all the newest features. For a device that I use constantly and carry around eight to sixteen hours, that is essentially nothing. That's between one and a half and three cents per hour.

I understand everyone has a different set of financial circumstances, but for a device that useful, that we spend that much time using, why NOT have the latest and greatest, if it's well within your financial means? I'm not talking about buying a $100,000 car here. We're talking about $100/year for a device that most people use very frequently.

Re:I somehow doubt this is accurate

[Noah Haders]

Revenues do not equal profits.

Re:Reading comprehension

[EvilSS]

Not according to the article:

Apple accounted for 75 percent of the smartphone industry's profits in the second quarter, but that's down from more than 90 percent a year ago due to Samsung's Galaxy device lineup, according to Canaccord Genuity. Samsung's Galaxy S7 launch and the Note 7 follow-up likely indicate that profits will continue to do well, said Cannaccord Genuity analyst T. Michael Walkley in a research note. The other item that may ding Apple's industry profit is that customers are delaying purchases ahead of the iPhone 7 launch. Add it up and Samsung has captured more than 30 percent of industry profits in the second quarter.

This is why I still read /. smartphone threads...

[Brannon]

because I am endlessly entertained by just how completely clueless the typical /.er is about why some electronic products succeed while others fail.

People don't buy iPhones because of benchmarks.