Samsung is now the world's most profitable phone seller, ahead of Apple, Strategy Analytics revealed in a new report on Friday. The research firm said Apple's downfall can be attributed to lower iPhone 5 shipment volumes and increased competition in China, where Samsung is faring better than the iPhone maker.
Strategy Analytics pegged Samsung's Q2 2013 profit at $5.2 billion while Apple's fell in at $4.6 billion for the quarter. Samsung was able to achieve its dominant position with better shipment volumes, increased wholesale prices and better controls on pricing, Strategy Analytics senior analyst Neil Shah explained. Apple had held its top position for four years, from the third quarter of 2009 until the first quarter of this year, but its decreased profit margins as a result of increased competition have taken a bite out of its overall profits.
"Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China," Strategy Analytics Executive Director Neil Mawston said. "Apple is now under intense pressure to launch more iPhone models at cheaper price-points or wit larger screens to fend off the surging competition and recapture lost profits in the second half of 2013." Apple is expected to launch a low-cost iPhone in the fall to complement the iPhone 5S, and the device could very well end up on China Mobile, the world's largest wireless carrier. If that does indeed happen, Apple could see its fortunes take a turn.
Strategy Analytics: Samsung Becomes World's Most Profitable Handset Vendor in Q22013
Boston, MA – July 26, 2013 – According to the latest research from Strategy Analytics, Samsung became the world's most profitable handset vendor in Q2 2013. Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.
Neil Shah, Senior Analyst at Strategy Analytics, said, "We estimate Samsung's operating profit for its handset division stood at US$5.2 billion in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion. With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor."
Neil Mawston, Executive Director at Strategy Analytics, added, "Apple's reign as the world's most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013. Apple's profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.