Apple Grabs 70% of Global Smartphone Profits in Q4 Despite all the Talk of Samsung being the New Mobile Leader
With all the talk in the press about Samsung being the king of smartphones, the real stats show a much different picture. It was reported last week that Apple has surpassed Samsung to become the top mobile-phone maker in the U.S. and a new report issued by Hong Kong's Counterpoint Research clearly acknowledges that Apple nabbed 70% of the global smartphone profits, Samsung 25% and Nokia 2%. How great is Samsung's leadership when they could only muster about a third of Apple's profits while offering 5 to 10 more smartphone models than Apple? It just goes to prove that Samsung's so-called smartphone leadership is in bravado alone pumped up by the press who thinks that market share is the only measure of leadership.
The Korean sourced report states that Apple and Samsung Electronics took 95% of the total operating profit, up from 66% in the fourth quarter of 2011. Yet despite an increase in the number of smartphone subscribers, mobile operators saw their earnings rate dip at the tail of discounted rates and subsidies.
In the fourth quarter of 2012 when the full-blown sale of the iPhone 5 kicked in, Verizon Wireless and AT&T, the two major US mobile carriers, saw their fourth-quarter net loss widen to 4.2 billion US and 3.86 billion US, respectively.
It is also true of Korean mobile carriers. KT and LG U+ posted a weak operating profit margin owing to various kinds of subsidies and rising marketing costs that came amid increased investment in 4G LTE services. This is why KT and others like Lenovo are whining about carrier subsidies holding back their sales.
Counterpoint Research's Peter Richardson noted in his report that "Mobile carriers in the US and other advanced markets are cutting their subsidies due to deteriorating revenue structures. China is the only market where subsidies are on the rise. Thus, the fate of mobile phone makers will hinge on their responses to the Chinese market this year."
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