The mobile market continues to become a two-horse race for profitability between Apple and Samsung. The two rivals are now commanding 109% of profits – a number made possible because its competitors are actually losing money in the smartphone space. The latest data from Canaccord Genuity provided by analyst T. Michael Walkley estimates that Apple took 56% of the operating profits for feature phones and smartphones in the third quarter of calendar 2013. Coming in close second was Samsung, which took 53% of the industry profits.
In contrast, all of the competition lost money, with the exception of Sony, which ended up breaking even during the quarter. The biggest loser of the bunch ended up being BlackBerry, which represented a -4% of industry profits, followed closely by Google-owned Motorola, which took -3%. Nokia, LG and HTC were all about even with one another, each representing -1% of mobile profits according to the data.
Walkley noted that the share controlled by Apple and Samsung is likely lower when the profits of Chinese vendors such as Lenovo, ZTE, Huawei and Coolpad are included. However, the Chinese manufacturer profitability data isn’t available and couldn’t be included in the industry-wide comparison.
The Cupertino California company saw its share of profits increase from 53% in the second quarter to 56% in the third quarter, despite the fact that the company was transitioning to the launch of the iPhone 5S and iPhone 5C, late in the quarter. Walkley said Apple’s greater share of profits came to slightly higher sequential iPhone unit sales as well as more pronounced losses from both BlackBerry and HTC. The analyst mentioned the following regarding the matter:
Given a full quarter of iPhone 5s/5c sales, we anticipate very strong operating profit share for Apple during the holiday quarter. Further, we believe Apple's value share of the handset market is even higher than our estimates... considering Apple's dominant share of the tablet market, as some Android OEMs include tablet sales in reported smart device sales and profits.
Source: Canaccord Genuity, Strategy Analytics via AppleInsider