Operating profits gap between Apple and Samsung hits all-time low in Q4 2016


Samsung Electronics has reported a solid 17% operating profit rate for Q4 2016, which could mean that the Seoul-based manufacturer has managed to narrow the gap with its main rival Apple to an-all time low.

According to BusinessKorea, on January 8, South Korean industry sources reported that sales and operating profits of Samsung Electronics respectively stood at $44.3 billion and $9.2 billion in the last quarter of 2016, registering a operating margins rate of 17.36%. These figures are the highest for the company in the last two years, and are very surprising, as Samsung's Galaxy Note 7 fiasco caused huge losses for the East Asian tech giant in Q3 2016. These figures can be explained with the strong performance of the Galaxy S7, combined with a boom in the semiconductor industry and increased sales of display panels.

Apple and Samsung are the current leaders in the global smartphone market, but Apple has always surpassed Samsung in terms of ROS (return on sales) ratio. The biggest gap between the two manufacturers was recorded two years ago, as ROS rates for Apple and Samsung respectively stood at 31.86% and 11.52% for Q4 2015.

2015 was by far the best fiscal year for Cupertino, as the company enjoyed record profits based on its large market share. However, things have changed for Apple since then, as annual sales and net profits have both retracted for the first time in 15 years. In addition, the output production of the iPhone 7 was recently slashed by 10%, as sales of Apple's latest premium handsets have been rather lethargic.

Experts predict that Tim Cook & Co. will record an operating profit rate of around 20% for the last quarter of 2016, which means that the gap between Apple and Samsung could stand at an all-time low at around 3%.

source: BusinessKorea

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29 Comments

1. Mxyzptlk unregistered

Samsung Mobile division is not the overall Samsung Company.

3. trojan_horse

Posts: 5868; Member since: May 06, 2016

It comprises Samsung Mobile as well... Salty Mxy. Won't you stop making your tears public?

6. ibend

Posts: 6747; Member since: Sep 30, 2014

yeah right... and it isnt like apple only make mobile devices... it's the whole apple vs the whole Samsung

9. ph00ny

Posts: 2031; Member since: May 26, 2011

Pretty much sums it up. He keeps reposting the same crap but you don't see apple split into "mobile" and "computer" division unless he considers imacs as a mobile device

22. piyath

Posts: 2445; Member since: Mar 23, 2012

Apple doesn't make display panels and rams and storage and every s**t part in the world and sell them to other Electronics manufacturers and earn money just like Samsung. Most of Samsung's direct income is coming from not selling phones or consumer electronics, but from making spare parts for other manufacturers to make devices. Apple earn 100% by selling end products to consumers. THAT'S A HUGE DIFFERENCE. If Apple starts to produce in house displays and storage and RAM and CPUs (Just like TRUMP wants) for their devices Samsung won't have business.

25. trojan_horse

Posts: 5868; Member since: May 06, 2016

"If Apple starts to produce in house displays and storage and RAM and CPUs (Just like TRUMP wants) for their devices Samsung won't have business." Apple would have to invest heavily in R&D to achieve that... It will greatly reduce the huge amount of money it has in Irish banks. Not to mention that it will take several years before Apple could be at the global level whichi Samsung is. You can't manufacture each and every component that goes into your products.

27. s.mrabet

Posts: 147; Member since: Oct 26, 2011

Because they cant!! Who would buy a s**tty display from apple??? you sound like a real moron :)

7. ph00ny

Posts: 2031; Member since: May 26, 2011

and Samsung Electronics is not the overall Samsung company

8. willard12 unregistered

Samsung Electronics is also not the overall Samsung Company. What's your point?

11. iushnt

Posts: 3105; Member since: Feb 06, 2013

Samsung is also into insurance, construction, hospitality etc

21. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Neither one of you get it. Samsung is made up of independent companies that pay to use the Samsung name. If Samsung Electronics gets onto legal trouble, Samsung LTD will not help them. Its not teh same like Pepico. Pepsico owns lo=ts of brands that have their own name and product. But they are solely owned by Pepico. Samsung Electronics is not owned by Samsung LTD. Samsung Electronics, bought Samsung Displays to which they started as a partner first. Samsung Electronics bought SDI. Again they partnered and then Samsung bought them out. Samsung Electronics owns SDI and Displays, as Pepico owns Taco Bell and Pizza Hut. But Samsung LTD doesn't own Samsung Electronics, You need to understand the difference in a Comglomerte vs Subsidary con·glom·er·ate noun kənˈɡlämərət/ sub·sid·i·ar·y səbˈsidēˌerē/Submit adjective 1. less important than but related or supplementary to 1. a number of different things or parts that are put or grouped together to form a whole but remain distinct entities.

23. willard12 unregistered

If you're going to teach lessons, can you start by telling me what a "comglomerte" and "subsidary" are? Though Samsung Group has purchased (aka bought and own) several subsidiaries, Samsung Group initially separated itself into 4 x different subsidiaries. Being that I do understand what a conglomerate and subsidiary are, I understand that Samsung Group is a conglomerate with many subsidiaries. I also understand that Samsung LTD does not own Samsung Electronics they are two subsidiaries of Samsung Group. So no, one subsidiary does not own the other. But, the group owns both. Samsung Group is one/single conglomerate with 1(one) chairman - Lee Kun-hee, who is responsibile for all of its subsidiaries. So no, these aren't businesses simply using the Samsung name. They are aquired, sold, or publicly traded under the supervision and of 1(one) chairman. For your reference: "Lee Kun-hee sold off ten of Samsung Group's subsidiaries, downsized the company, and merged other operations to concentrate on three industries: electronics, engineering and chemicals. "

26. trojan_horse

Posts: 5868; Member since: May 06, 2016

Exactly that, willlard12. Techie has been spewing the hypothesis that Samsung's subsidiaries are just different companies payinng to use the Samsung name... while in fact, they are all legitimate subsidiaries of Samsung conglomerate, were split into divisions from Samsung Group. Techie does not even know what he's talking about.

2. trojan_horse

Posts: 5868; Member since: May 06, 2016

"Operating profits gap between Apple and Samsung hits all-time low in Q4 2016" Which means the Note7 fiasco didn't destroy Samsung, which is what some of the delusional iFans were singing, dancing and rejoicing for... LMAO. Samsung FTW!

4. sissy246

Posts: 7111; Member since: Mar 04, 2015

LMAO...

28. s.mrabet

Posts: 147; Member since: Oct 26, 2011

without the Note 7 trouble, the gap wouldnt exist anymore

5. gersont1000

Posts: 473; Member since: Mar 13, 2012

I can't wait for the Galaxy S10. That's because MAYBE at that point iPhoneArena will stop linking to the "Note 7 fiasco" on every damn article.

16. RoboticEngi

Posts: 1251; Member since: Dec 03, 2014

They never will....they have to say something bad about Samsung, so their precious apple doesn't look too pathetic....

18. Klinton

Posts: 1409; Member since: Oct 24, 2016

They will never understand, that even if it was killed, the mighty gorgeous Note7, contributed more positives than negatives to Samsung's brand respect. BTW it's not only PA, but all US media doing this.

10. ebilcake

Posts: 1229; Member since: Jul 16, 2016

Any shareholders here? No.. Okay, so basically nobody here really gives a s**t. Moving on...

12. Khyron

Posts: 397; Member since: Sep 28, 2015

And profits Will Still fall down this year for the fruit company

14. sissy246

Posts: 7111; Member since: Mar 04, 2015

I agree only if Apple does not step up this year with a all new phone with more features. If it turns out just to be a small upgrade they will keep the down hill spinning going.

15. phonearenarocks

Posts: 606; Member since: Mar 26, 2015

With Apple getting the Samsung's AMOLED display in its next one, it could be the biggest upgrade across any two generations of iPhone

19. Klinton

Posts: 1409; Member since: Oct 24, 2016

Calm down. lol Next will be iPhone7S. Wait 2018

13. jroc74

Posts: 6023; Member since: Dec 30, 2010

I think its safe to say that Samsung is the only competitor to Apple with smartphones now.

17. MrElectrifyer

Posts: 3960; Member since: Oct 21, 2014

Here's hoping that drastically changes with an iteration of the Surface Phone...the more true competition, the better.

20. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Samsung didnt lose any money if youi do teh math. Sure they lost $5B on the Note 7. But considering more than 90% of the Note 7 owners, took the S7 Edge in most cases, meand Samsung made most of that money back. They just didnt make the extra. They simply covered their lost and turned a profit. No matter if a phone fails or not. If Samsung gets you to buy another model from them, they still get paid. The S7 Edge is about $100 cheaper than the Note 7 was. So they actually didn't lose anything. Plus Apple will be giving them back at least 1/2 of that $500M they got from Samsung just a few month ago. Samsung, unlike Apple; doesn't just rely on the sales of a single product. 70% of Apple money is tied into the iPhone. If Apple loses 50% of its sales they are gonna be hurting.Yet they keep milking the fools. Samsung could very well sell another almost 400M phones this year. If they do, Apple is in more trouble. Apple needs this anniversary iPhone to be more than a low resolution Galaxy S6. If the iPhone 8 isn't at least better than the S6/S6 Edge, Apple is done.

24. kevin91202

Posts: 642; Member since: Jun 08, 2014

"Samsung Electronics has reported a solid 17% operating profit rate for Q4 2016, which could mean that the Seoul-based manufacturer..." -Plamen D. (PA) Oh boy; another incompetent PA writer. FYI: Samsung Electronics is not based in Seoul. A simple google search would tell you that. I guess PA will never employ competent writers.

29. kevin91202

Posts: 642; Member since: Jun 08, 2014

It appears PA is deleting comments. How sad. I had posted a comment regarding the poor writing ability of this article's author. Now it's gone. Lol.

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