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Apple, Samsung Control 106% of Handset Industry's Profits

By - Source: Barrons | B 33 comments

Technology giants capitalizes on losses by competitors.

Samsung and Apple are both generating more than 100 percent of the handset industry's earnings.

According to a report from Canaccord Genuity, the two technology giants are responsible for 106 percent of the industry's profits. How exactly can two companies exceed the 100 percent mark, though? Well, it's possible when other competitors such as Research in Motion, Nokia, Motorola and Sony posted operating losses.

"With Samsung extending its overall smartphone and Android market share combined with Apple's strength in high-end smartphones, competing smartphone [original equipment manufacturers] continued to struggle to compete with these dominant smartphone OEMs," Canaccord analyst T. Michael Walkley said.

The two companies have now dominated more than 100 percent of the industry's profits for the second quarter in a row, Walkley added. During the second quarter, Apple and Samsung boasted a 108 percent share.

Walkley predicts that Apple generated 59 percent of the industry's operating profits during 2012's third quarter. Samsung, meanwhile, was responsible for 47 percent of the profits, representing a 10 percent increase from 37 percent in the second quarter. The analyst expects Samsung to maintain its leading market share position during the fourth quarter and beyond.

Samsung recently announced quarterly profits of $7.4 billion, spearheaded by Galaxy S3 sales. Apple, meanwhile, posted profits of $41.66 billion during the fiscal 2012 year.

 

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  • 28 Hide
    rebturtle , October 30, 2012 7:18 AM
    106% = Math fail
  • 25 Hide
    ronch79 , October 30, 2012 7:33 AM
    I'm not accepting the explanation that the reason why it's 106% is because of other companies' losses. 100% makes up the profits of all earnings, not counting losses, that's why we say 'earnings'. There's no way you could put other companies' losses on top of Samsung's and Apple's earnings and call it 106%.
  • 23 Hide
    cats_Paw , October 30, 2012 7:20 AM
    My thoughts exactly
Other Comments
  • 28 Hide
    rebturtle , October 30, 2012 7:18 AM
    106% = Math fail
  • 23 Hide
    cats_Paw , October 30, 2012 7:20 AM
    My thoughts exactly
  • 14 Hide
    dthx , October 30, 2012 7:24 AM
    Oh ... and I thought that Jean-Claude Van Damme was insane with his 1+1= 11 theory ;-)
  • 15 Hide
    JOSHSKORN , October 30, 2012 7:29 AM
    dthxOh ... and I thought that Jean-Claude Van Damme was insane with his 1+1= 11 theory ;-)

    Then there's McDonald's 2+2=2 theory. Or was that Burger King? I forget.
  • 25 Hide
    ronch79 , October 30, 2012 7:33 AM
    I'm not accepting the explanation that the reason why it's 106% is because of other companies' losses. 100% makes up the profits of all earnings, not counting losses, that's why we say 'earnings'. There's no way you could put other companies' losses on top of Samsung's and Apple's earnings and call it 106%.
  • 22 Hide
    dthx , October 30, 2012 7:41 AM
    ronch79I'm not accepting the explanation that the reason why it's 106% is because of other companies' losses. 100% makes up the profits of all earnings, not counting losses, that's why we say 'earnings'. There's no way you could put other companies' losses on top of Samsung's and Apple's earnings and call it 106%.

    It fits perfectly in the Apple way of presenting things:
    Processors are always 2x or 4x faster than their predecessors (so the iPad 4 must now be like 128x faster than the first one ;-) ) The new screen is 75% less reflective (how do you measure that? less reflective than what?), and so on... but there needs to be 5 iSomething articles per day on THG.


  • 5 Hide
    murzar , October 30, 2012 8:11 AM
    Quote:
    Apple, Samsung Control 106% of Handset Industry's Profits


    In the 5th dimension?
  • 11 Hide
    ZEPd3Z , October 30, 2012 8:29 AM
    dthxless reflective than what?

    A Glass mirror.
  • 10 Hide
    Anonymous , October 30, 2012 8:52 AM
    this author need to stop writing all this apple stuff... and should be beaten every time time he starts doing it again
  • 2 Hide
    diddo , October 30, 2012 10:08 AM
    Profit - you are doing it right :) 
  • 4 Hide
    wemakeourfuture , October 30, 2012 10:14 AM
    dthxOh ... and I thought that Jean-Claude Van Damme was insane with his 1+1= 11 theory ;-)


    1+1 can be 11, + represents concatenation
  • 5 Hide
    Azimuth01 , October 30, 2012 10:32 AM
    Samsung is just baiting Apple into a false scene of security. Just when Apple thinks things are going great, Samsung will stop selling Apple their displays. There's 4 suppliers in the world of flat screen panels? And 2 of them suck so bad that the screens are only found in Chinese rip offs....the other two are Samsung and Sharp.
    Good luck getting a retina display from Sharp.....
  • -6 Hide
    halcyon , October 30, 2012 10:36 AM
    ticticticthis author need to stop writing all this apple stuff... and should be beaten every time time he starts doing it again

    I'd imagine he was hired to do the Apple reporting. ...and because the teens here don't like Apple doesn't mean that there is something flawed with his journalism.
  • 3 Hide
    greghome , October 30, 2012 10:39 AM
    dthxOh ... and I thought that Jean-Claude Van Damme was insane with his 1+1= 11 theory ;-)


    Base 2 numbers?
    1+1 = 10 :p 
  • 0 Hide
    canesin , October 30, 2012 10:50 AM
    This means that they are earning a piece of the debt generated with the loss of other competitors, such as Nokia and Motorola. This is perfectly possible, economy is not high school math.
  • 0 Hide
    x3style , October 30, 2012 11:10 AM
    Samsung's Planet has to be twice the size of apple's planet to put things in perspective with accurate numbers.
  • 5 Hide
    spookie , October 30, 2012 12:12 PM
    samsung sold more smartphones than Apple and yet they didn't make as much profits...Apple products are clearly over priced
  • 1 Hide
    Anonymous , October 30, 2012 12:52 PM
    more then 100 %. Hey u this is not cpu or gpu performance chart.
  • -3 Hide
    gfg , October 30, 2012 12:56 PM
    Example of a scenario
    $Millions % entry (+/-) % entry (+)
    samsung 10 44% 44%
    apple 15 67% 67%
    htc -0.5 -2% 0%
    sony -0.2 -1% 0%
    other… -1.0 -4% 0%
    23.2 100% 107%
  • -1 Hide
    freggo , October 30, 2012 1:12 PM
    rebturtle106% = Math fail

    Nope.
    4 companies profits...

    a $120
    b $80
    c -$20 ( a loss)
    d -$30 ( also a loss)

    Total profit of the 4 companies = $150 ( 120 + 80 minus the $50 losses)

    A therefore has 80% of the total profits ($120 of $150)
    B has 53% of the profits ( $80 of $150)

    So A and B combined generated 133% of the total profits in this example.

    See, it works :-)

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