Samsung Grabs 95 Percent of Global Android Smartphone Profits

Overall Android smartphone profits reached $5.3 billion in total during the first quarter of 2013, according to Strategy Analytics.

Consumer electronics giant and smartphone handset manufacturer Samsung has emerged in recent years as a major rival to Apple and its iPhone, churning out both high-end and lower-end handsets running Google’s Android operating system.

A report from IT research firm Strategy Analytics found Samsung dominated the Android smartphone market in the first quarter of the year, capturing an impressive 95 percent share of all Android smartphone profits. Overall Android smartphone profits reached $5.3 billion in total during the first quarter of 2013.

"An efficient supply chain, sleek products and crisp marketing have been among the main drivers of Samsung’s impressive profitability," Woody Oh, a senior analyst at Strategy Analytics, said in a statement. "LG followed in second place and took 3 percent global profit share. LG delivered a small profit during the quarter, but it currently lacks the volume scale needed to match Samsung’s outsized profits."

LG placed an almost laughably distant second place with 2.5 percent profit share, while the combination of other vendors hawking Android handsets grabbed 2.7 percent of the profit share. The report noted the data includes Android smartphone hardware profit only, and it does not include any other operating systems and does not include tablets or any other devices.

"Samsung is, for now, the undisputed king of the global Android smartphone industry. We believe Samsung generates more revenue and profit from the Android platform than Google does," Neil Mawston, executive director at Strategy Analytics, said in a statement. "Samsung has strong market power and it may use this position to influence the future direction of the Android ecosystem. For example, Samsung could request first or exclusive updates of new software from Android before rival hardware vendors."

A report earlier this week from IT analytics firm Gartner also found Samsung is the overall top handset manufacturer for mobile phones worldwide, amid a slowing market. The company grew 13 percent in the first quarter of 2013, as its share of smartphones reached 30.8 percent, up 3.2 percentage points from the first quarter of 2012.

In the first quarter of 2013, smartphones accounted for 49.3 percent of sales of mobile phones worldwide, the report said. This is up from 34.8 percent in the first quarter of 2012, and 44 percent in the fourth quarter of 2012. However, worldwide mobile phone sales to users totaled nearly 426 million units in the first quarter of 2013, just a slight increase of 0.7 percent compared with the same period last year.

Samsung is having a busy year building out its universe of popular Galaxy mobile devices, which all run the Android operating system. Samsung’s flagship smartphone debut for 2013, the Galaxy S4 smartphone, is viewed as the strongest competitor to the Apple iPhone.

Of those who purchased a Samsung smartphone in the last year, more than half (52 percent) purchased a Galaxy S3, 21 percent a Galaxy S2 and 5 percent a Galaxy Note 2. And compared with purchasers of other brands, Samsung purchasers were more likely to cite "handset cost" and "carrier brand" as key drivers, an April report from Kantar Worldpanel ComTech found.