The global smartphone market is growing at a very fast pace, and to keep up with it the smartphone manufacturers are launching a host of devices in every segment. The total operating profits, according to a report by Strategy Analytics, were close to $9.4 billion in the third quarter of 2016.
Of all the smartphone makers, Apple captured a whopping 91% of the profit market share, that equates to $8.5 billion. An iPhone costs around $200 to make and retails at $700, which makes the profit per iPhone extremely high as compared to other smartphones.
Trailing by a huge margin behind, but leading amongst the Android smartphone makers, Huawei realised a profit of $0.2 billion, capturing a market of 2.4%. Vivo and Oppo both captured 2.2% of the global operating profits. This is the first time it has become the most profitable Android vendor across the globe.
Contrasting with Q2 2016, Samsung had 31% of the profit market share and now it is no where in the top four. Only a quarter change and the crisis has hit Samsung so hard. The Korean giant has struggled with Note 7 sales, impacting its other smartphones as well.
“Apple’s ability to maximize pricing and minimize production cost is hugely impressive and the iPhone continues to generate monster profits. Huawei, Vivo and OPPO are the next three most profitable smartphone vendors globally this quarter, but they are still a long way behind Apple,” the report said.
Three of the world’s top four most profitable smartphone vendors are currently Chinese. Huawei, Vivo and OPPO have not only improved their smartphone product lineups this year, they have also enhanced their operational abilities and kept a tight lid on expanding distribution costs.
Samsung’s fiasco this year has further resulted in huge losses, not only in terms of balance sheet but also market value and brand image. The Chinese players have been pricing their phones aggressively, focusing on distribution volumes. Samsung’s loss is other smartphone makers’ gain and this is how situations change in the blink of an eye.
The amount of lead Apple has is phenomenal and all Chinese players combined will not be able to overtake it. Unless Apple does something extremely unprofessional and unethical, the company will continue to be the global leader in profits.
Source: Strategy Analytics