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Apple and Samsung grabbed virtually all industry profits in Q1 2012

Posted: , by Victor H.

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Apple and Samsung grabbed virtually all industry profits in Q1 2012
By now, you probably already know that nearly all of the mobile industry profits go into the pockets of Apple and Samsung. Apple has got the lion’s share of them, and Samsung grabs a noticeable chunk of the pie. The rest? Not so much. And the financials from last quarter seem to only worsen that trend.

Apple announced staggering profits of $11.6 billion for Q1 2012, while Samsung broke its own records and reported $4.5 billion in profit, $3.9 billion of which come from mobile alone. This translates into Apple having an 80% share of the market, while Samsung holds 20%, leaving zero space for other phone makers. 

The two companies combine for 74% of the industry’s revenue, according to Raymond James analyst Tavis McCourt’s estimates. In UBS analyst Maynard Um’s predictions, Apple and Samsung would have had 90% of the profits, but it turns out that the number is even larger, and this should be troubling for competing companies.

“It is getting increasingly hard to understand where the rest of the device vendors will get the capital to fund necessary R&D and sales and marketing investments to continue to compete with Apple and Samsung,” McCourt said.

“With essentially all of the other hardware vendors besides Apple and Samsung struggling to find profits to reinvest into R&D, Microsoft and Google have to be wondering who their hardware partners will ultimately be. Neither wants to be in a position where they have to take on more of the R&D burden, and neither want to have to initiate bidding wars to give Samsung an incentive to focus on its platform. Our assumption is that both Huaweii and ZTE will be courted heavily over the next few quarters by both Microsoft and Google as they look to strengthen their stable of sustainable hardware partners.”

Those are some interesting forecasts for how the industry will develop. Do you agree that eventually the two Chinese phone makers will be the swing factor that decides how mobile platforms evolve?

via BGR

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posted on 30 Apr 2012, 08:41 6

1. TylerGrunter (Posts: 905; Member since: 16 Feb 2012)


Please Victor check your math: if Apple had 80% of the profit and Samsung had 20% then between both of them would have 100% of the profits, which it's impossible.
Add to that this other hint: 4 billion is to 12 billion as 20 is to 60, not 80...
That would add up if you had said that Apple has around 60% share of the profits not 80%...

posted on 30 Apr 2012, 08:54 6

5. preetmalhotra (Posts: 77; Member since: 27 Apr 2012)


:D
rest 20% goes to Nokia and HTC..
:P

posted on 30 Apr 2012, 08:46 3

2. sarb009 (Posts: 286; Member since: 15 Jun 2011)


samsung profits $4.5 billion and apple's is $11.6 billion. then how apple share is 80% n samsung share is 20% ??? i m confused and i cant calcuate this. anyone have any idea?

posted on 30 Apr 2012, 10:25 1

12. hung2900 (Posts: 793; Member since: 02 Mar 2012)


That's not the 1st time Victor's had a mistake in maths. In an article for tricking on Fools' day he said that a 6.7 inch screen is nearly two times bigger than 3.5 inch screen of Iphone, but the fact is nearly 4 times, not 2 times.

posted on 30 Apr 2012, 11:22

16. greathero1 (Posts: 472; Member since: 13 Jun 2008)


The Samsung profits that you speak of are for the entire company and divisions of Samsung. This is about the wireless industry.

posted on 30 Apr 2012, 13:16

19. sarb009 (Posts: 286; Member since: 15 Jun 2011)


ok samsung´s profit is $3.9 billion is just from mobile industry then its20% if the total profit is $16 billion but how the hell apple´s profit could be 80% which is less than $12 billion which is a bit less than 60% not 80%. do ur maths homework

posted on 30 Apr 2012, 14:46

28. greathero1 (Posts: 472; Member since: 13 Jun 2008)


Was that really necessary lol? Its a little off but 11.6 of 16 is about 73%, a lot more than the 60% you speak of but hey, 73% is a little less than 80% so they could have been a little more accurate. Asi haces su tarea de matematicas y aprende como escribir chico lol! jk

posted on 30 Apr 2012, 08:47 5

3. sarb009 (Posts: 286; Member since: 15 Jun 2011)


where is my maths teacher ? i need help right now !!!!!

posted on 30 Apr 2012, 08:50 2

4. darac (Posts: 2156; Member since: 17 Oct 2011)


This sounds silly. Like R&D are being financed purely out of profits.
While the reality is that R&D is just one of the expenses that go into the company's overall financial bill.
It's like saying that if Lockheed Martin has only a billion of dollars of yearly profit, they don't have big R&D.
For example, Huawei spent billions on research, which affected its profit.
Any extra money that is NOT being spent-that is profit.

posted on 30 Apr 2012, 09:40 1

10. darac (Posts: 2156; Member since: 17 Oct 2011)


..and just to add that Apple usually has lower overall revenue than Samsung, but they spend way less on employees and, ironically, R&D!(Samsung spends about 2-4 times more on R&D than Apple)
Hence their sky-high profit.

posted on 30 Apr 2012, 10:16 4

11. remixfa (Posts: 13903; Member since: 19 Dec 2008)


quite true. that's why Samsung Invents new tech and apple just pays others for it.

r&d is most definitely figured in to costs before profits.. not after.
profits are what is left after all expenditures have been paid.. not before.

silly article

posted on 30 Apr 2012, 10:59 2

13. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Except the current smartphone market and tablet market was defined by Apple and everyone else just copied.

posted on 30 Apr 2012, 21:05

31. InspectorGadget80 (Posts: 6416; Member since: 26 Mar 2011)


Taco50 please shut THE HELL UP WITH ANDROID COPYING iOS.

posted on 30 Apr 2012, 11:20 1

15. greathero1 (Posts: 472; Member since: 13 Jun 2008)


Thats not completely true. The reason Samsung's R&D is so much is because Samsung is in many more market segments than Apple so of course they spend more money. They compete in a lot more industries than Apple does. Even you broke this down and just included mobile space, Apple would still beat them hands down and probably spend just as much money as Samsung does on R&D.

posted on 01 May 2012, 12:35

38. remixfa (Posts: 13903; Member since: 19 Dec 2008)


greathero1

samsung mobile is a completely separate division of samsung. Samsung is like an octopus with each division being an arm acting independently of each other. Samsung Mobile spends billions on AMOLED, LCD, and processor (EXYNOS) research as well as on dozens of other things.

What Samsung Mobile spends in R&D is only for samsung mobile.

posted on 30 Apr 2012, 09:09 2

6. som (Posts: 768; Member since: 10 Nov 2009)


All other phone makers didn't made profit so only Apple made profit of $11.6 billion (61%) and Samsung $4.5 billion (39%) it is 100%. But 80% to Apple and 20% to Samsung was a wrong calculation by an editor.

posted on 30 Apr 2012, 09:34

7. darac (Posts: 2156; Member since: 17 Oct 2011)


U serious?
HTC, LG, ZTE, Huawei also posted profits.
HTC had it's lowest profits in recent years, but still around 150million dollars.
They will bounce back to around 300m in the next quarter.
And we've yet to see about Motorola mobility(small profit not impossible), and Sony mobile(a loss is almost certain, but they will be back in green by the year's end).
The only heavy loser in the mobile industry right now is Nokia

posted on 30 Apr 2012, 11:04 2

14. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Your Math is way off. You don't divide 4.5 by 11.6. You have to divide 4.5 by the total which is at least 16 billion.

posted on 01 May 2012, 12:26

36. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)


I don't think you should worry about the earnings. Your bet with Remix was smartphone sales.

posted on 30 Apr 2012, 11:26

17. greathero1 (Posts: 472; Member since: 13 Jun 2008)


That 4.5 billion is for the entire company of Samsung. This article is about a specific market segment so thats probably why there is a discrepancy.

posted on 30 Apr 2012, 13:19 1

21. sarb009 (Posts: 286; Member since: 15 Jun 2011)


yes apple´s profit is about 60% not 80% agrre with u. and taco is a sheep with i in front of it.

posted on 30 Apr 2012, 09:34

8. mercorp (Posts: 968; Member since: 28 Jan 2012)


$$$...

posted on 30 Apr 2012, 09:37 2

9. mercorp (Posts: 968; Member since: 28 Jan 2012)


Lol the picture from the s3 teaser..n

posted on 30 Apr 2012, 12:53 1

18. gallitoking (Posts: 4684; Member since: 17 May 2011)


do this mean that Taco won the bet...

posted on 30 Apr 2012, 13:23 1

22. taz89 (Posts: 2014; Member since: 03 May 2011)


tacos and remix bet was who would sell the most smartphones..based on 1 source taco would win and based on another samsung would win...

posted on 30 Apr 2012, 13:47 1

26. gallitoking (Posts: 4684; Member since: 17 May 2011)


thank you taz.. I was sick all weekend so I wasnt able to keep up to what happen here...

posted on 01 May 2012, 12:38

39. remixfa (Posts: 13903; Member since: 19 Dec 2008)


300 reports say samsung won. 1 report says apple MIGHT have won.. so of course Taco is trying to say he won. Yet his "proof" even said that Samsung more than likely won.

posted on 01 May 2012, 12:31

37. gwuhua1984 (Posts: 1237; Member since: 06 Mar 2012)


All the sources that came out before two weeks ago are comparing Apple Q1 results to Samsung 2011 Q4 result. Samsung's Q1 results were just posted last week. Profit wise, Samsung is behind, but smartphone sold and shipment wise, Samsung won by almost 10%. It's too bad the bet was on smartphones sold and shipped, it's quite obvious that profit wise Apple would win.

posted on 30 Apr 2012, 14:07 1

27. tward291 (Posts: 559; Member since: 14 Feb 2012)


well both apple and sammy are both *** apple is like the guy that real popular and doesnt want anybody to know he *** lol and sammy is the retarted kid that gets bullied and really wishes he was the popular guy so he dress like him act like him but can never be hiim but they both end up being *** togther.

posted on 30 Apr 2012, 15:48

29. PhoneArenaUser (Posts: 5478; Member since: 05 Aug 2011)


Totally nonsense...

posted on 30 Apr 2012, 21:06

32. InspectorGadget80 (Posts: 6416; Member since: 26 Mar 2011)


Just love that picture laugh every time i see it.

posted on 01 May 2012, 09:40

35. Johnny_Mnemonic (Posts: 240; Member since: 05 Oct 2011)


Taco and gallito are in front of everyone , they came out good

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