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

Posted by msmash on from the smartphone-market dept.

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.

11 of 161 comments (clear)

  1. Stop chasing the shiny by TWX · · Score: 5, Insightful

    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.

    --
    Do not look into laser with remaining eye.
    1. Re:Stop chasing the shiny by swillden · · Score: 4, Insightful

      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?

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
    2. Re:Stop chasing the shiny by jon3k · · Score: 3, Insightful

      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.

  2. No surprises there by TonyJohn · · Score: 3, Interesting

    So, in an established market you can't succeed big unless and until you beat the big players. You either make a loss or small profit trying to beat them, or you carve out a niche and make a more reliable profit which will never be big (so long as it remains a niche).

    --
    Owl tried to think of something wise to say, but couldn't.
  3. I somehow doubt this is accurate by LichtSpektren · · Score: 3, Interesting

    LG's been talking about cutting their mobile division entirely, so I don't doubt how cutthroat the competition is. But it seems awfully unlikely that Samsung and Apple are the only profiteers, since Lenovo and Huawei both boast about how much money they're taking in.

    1. Re:I somehow doubt this is accurate by Noah+Haders · · Score: 3, Insightful

      Revenues do not equal profits.

  4. New math? by MitchDev · · Score: 3, Funny

    If Apple accounts for 75%, and Samsung 30%, that equals 105%... does not compute

    (Yes I know, they specified Profits for Apple, poor writing by the author actually)

    1. Re:New math? by jeremyp · · Score: 3, Informative

      Because everybody else together is making a loss.

      Let's pretend the total profit of the entire smart phone industry is $100. We look at Apple's profits and find they are $75. We look at Samsung's profits and find they are $30. We look at everybody else and find that, in total, they are losing $5 between them.

      --
      All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
  5. Re:Reading comprehension by EvilSS · · Score: 3, Insightful
    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.

    --
    I browse on +1 so AC's need not respond, I won't see it.
  6. This is why I still read /. smartphone threads... by Brannon · · Score: 4, Insightful

    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.

  7. Re:Apple just has temporary advantage by pastafazou · · Score: 3, Interesting

    your analysis is total horseshit. My wife switched from Apple to Samsung because of the cost savings. She thinks the Samsung is an inferior product. It glitches and crashes occasionally, and the auto-correct is horrible compared to the older Apple version she had been using. I'm sticking with Apple because: 1. I own a Mac, and the apps integrate well
    2. I like my current iTunes setup, playlists, etc
    3. I was impressed by the camera on the current model
    4. I agree with my wife about the auto-correct sucking on her Samsung
    5. All 5 of my kids own iPods, and I can text them and facetime them, my wife can't
    6. I prefer iOS to Android as far as ease of use
    7. I don't like the fractured Android versions market.
    8. Better games in Apple store
    9. Development looks easier for iOS than for Android (I haven't actually gotten around to serious development on either yet)