Apple and Samsung grabbed virtually all industry profits in Q1 2012

“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.”