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    Samsung and Apple Captured 108 Percent of Smartphone Profits in Q2: Report

    By
    Michelle Maisto
    -
    August 7, 2012
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      So great is Apple and Samsung€™s dominance over the rest of the smartphone market that the pair together captured 108 percent of the handset industry€™s profits during the second quarter, Canaccord Genuity analysts reported Aug. 5. The striking figure was made possible, the analysts explained, by competitors such as BlackBerry maker Research In Motion, Nokia, Motorola and Sony posting operating losses during the June quarter.

      €œApple generated a 71 percent share of estimated Q2/12 handset industry operating profits with only 6.4 percent global handset unit market share,€ wrote report author T. Michael Walkley. €œWith its significant gains and increased margins during Q2/12, Samsung€™s share of industry profits increased from roughly 26 percent in Q1/12 to 37 percent in Q2/12.€

      This has been Samsung€™s year, and will continue to be until the next iPhone€”the so called iPhone 5€”arrives. Apple€™s sales were seasonally softer than usual during the second quarter, and are expected to continue to dip€”as they did from 22.4 percent in the first quarter to 16.1 percent in the second€”as consumers put off purchases in anticipation of the iPhone 5.

      These happy days for Samsung€”the company is expected to do all it can to move devices through the third quarter and take advantage of the iPhone 5-free summer€”are also massively benefitting Android, said the report. Google€™s mobile OS represented approximately two-thirds of all global smartphone shipments during the second quarter.

      €œAndroid continues to gain share from the struggling Symbian and BlackBerry ecosystems,€ wrote Walkley. €œIn fact, iOS and Android accounted for 82.7 percent of total smartphone OS shares in Q2/12, versus 79.9 percent in Q1/12 and 68.9 percent in the year-ago June quarter.€

      Over the short term, Canaccord doesn€™t have high hopes for a RIM recovery. BlackBerry€™s market share, by Canaccord€™s tallies, has fallen from 16 percent in 2010 to 10.7 percent in 2011 and 4.8 percent in the most recent quarter.

      €œWe estimate BlackBerry smartphone share could decline to below 3 percent by Q4/12, resulting in a small base for RIM to try and create a long-term competitive ecosystem once new BB 10 [BlackBerry 10] OS smartphones launch in [the first half of 2013].€

      Meanwhile, Android€”through not only Samsung but LG, HTC and Huawei€”will continue to take shares from BlackBerry.

      Windows Phone smartphones, however, are expected to emerge as the third major mobile ecosystem, despite a slow start that fell below the firm€™s expectations. During the second quarter, the OS controlled less than 6 percent of the market.

      €œWhile Windows smartphone sales disappointed in [the first half of 2012], we believe Windows has the potential to emerge as a viable third smartphone ecosystem and estimate Windows smartphone market share could reach 10 percent of the smartphone market exiting [calendar year 2013],€ wrote Walkley.

      Echoing an earlier report from Technology Business Research, Walkley wrote that Canaccord expects the carriers, wanting a third major OS in the marketplace, to get behind the Microsoft mobile OS.

      While the firm expects Windows Phone to emerge as a €œcompelling€ option for consumers, Walkley added, it likely won€™t finish the year with more than a 6 percent share of the market.

      Given the more than 100 percent share of profits claimed by Samsung and Apple, it€™s tempting to think the iPhone and the Galaxy S III are the only phones on the market. But not so, says the report. According to its checks with the four largest carriers, also selling well in July were the Motorola Droid Razr Maxx, at Verizon Wireless, the HTC One S at T-Moible, the HTC Evo 4G LTE at Sprint and, at AT&T, the Nokia Lumia 900.

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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