Samsung, Apple Grab 106 Percent of Handset Profits During Q3

 
 
By Michelle Maisto  |  Posted 2012-10-30
 
 
 

Apple and Samsung together captured 106 percent of the handset industry's profits during the third quarter of this year, as Nokia, Google-owned Motorola Mobility and BlackBerry maker Research In Motion all posted losses during the quarter, according to investment firm Canaccord Genuity.

Still, during a quarter in which handset shipments rose to 425 million, compared with 399 million the quarter before—and Apple held a 6.3 percent share of the overall handset market, to Samsung's 25.6 percent share—it was Samsung and Google that were the biggest winners.

Helped by the fact that the Apple iPhone 5 wasn't introduced until late September—the final days of the quarter—Samsung continued to enjoy strong sales of its Galaxy S III smartphones. By Canaccord's estimates, Samsung increased its smartphone market share to 32.2 percent during the quarter and was followed by Apple's 15.4 percent share and Sony's 5.1 percent share.

"Given Samsung's strong global brand, broad portfolio and growing smartphone market share," wrote Canaccord analyst Michael Walkley, "we believe Samsung will sustain its leading unit market share position during Q4/2012 and beyond."

Android, the Google-made mobile operating system, which runs on the Galaxy S III and other devices, was on more than two-thirds of the smartphones that shipped during the quarter.

"In fact, we estimate Android grew overall smartphone share during Q3/12 to 70.1 percent from 66.6 percent in Q2/12," wrote Walkley.

Also helping to drive Android use during the quarter were the HTC One series, which was among the three top-selling phones at AT&T, Sprint and T-Mobile, and the Motorola Droid Razr Maxx HD, which moved between the No. 2 and No. 3 slots at Verizon Wireless during the quarter. 

While Apple lost market share due to the late launch of the iPhone 5, Canaccord expects it to regain ground during the fourth quarter and described management as "encouraged" that Apple will still launch the iPhone 5 in 100 countries, including China, by the end of the year. Canaccord is forecasting sales of 45 million iPhones for a 20.6 percent share of the smartphone market.

The firm also expects strong sales of LTE-enabled smartphones during the fourth quarter, which will also be a winning proposition for equipment manufacturers and suppliers Qualcomm, RFMD, Avago and Skyworks—all four of which also benefit from sales of the iPhone 5.

Hoping to slow Apple's rebound, on Oct. 11 Samsung introduced the Galaxy S III Mini, a much smaller version of its record-selling smartphone. The display on the Mini, like on Apple's iPhone, is 4 inches on the diagonal, compared with the 4.8 inches of the original Galaxy S III.

Days later, Samsung introduced the Galaxy Note II, an unapologetically large smartphone that verges on being a tablet, as it features both a built-in stylus and a display that's 5.5 inches on the diagonal.

Introducing the Mini, JK Shin, Samsung's head of mobile, commented, "We continue to make every effort to provide extraordinary experiences to meet a wide variety of user needs."

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