“As Samsung warns investors of the risk of shrinking hardware profits in the future, analysts note that Apple’s future potential lies with exponential software growth, something the company has a distant lead in creating and an apparent exclusive in understanding,” Daniel Eran Dilger reports for AppleInsider.

“A variety of Apple analysts and observers have been struggling to identify the ‘next innovation’ that will propel Apple outward and enable new growth, suggesting everything from wearable computers to HDTVs,” Dilger reports. “However, Global Equities Research analyst Trip Chowdhry noted in speaking to AppleInsider that Apple’s recently outlined changes in reporting its performance highlight the company’s unique software solution to an issue facing every other smartphone maker: the increasing problem of turning a hardware profit in what was once an industry where money appeared to grow on trees.”

Dilger reports, “Not only are the majority of smartphone makers currently struggling to turn a minimal profit or actually losing money, but of the two issuing standout profits, Apple and Samsung, the latter has warned investors that its rapid ascent in smartphone hardware profitability may be a short term fluke.”

Read more in the full article here.