“Research firm Strategy Analytics proclaimed Friday that for the first time in four years, Apple is no longer the most profitable handset maker in the world,” Don Reisinger reports for CNET. “That honor now belongs to Samsung.”
“During the second quarter, Samsung’s global handset operating profits hit $5.2 billion, according to Strategy Analytics,” Reisinger reports. “Apple’s operating profit stood at $4.6 billion.”
Reisinger reports, “Strategy Analytics executive director Neil Mawston [said]… ‘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.'”
Read more in the full article here.
MacDailyNews Take: Crime pays, especially when justice is perpetually delayed.
[Thanks to MacDailyNews Readers “STL Misery” and “Edward W.” for the heads up.]
Related article:
Report: iPhone-sized smartphones dominate in usage stats; phablets are a fad – April 1, 2013
This has more to do with Apples unwillingness to respond to the voice of the customer. Many of us have been screaming for years that a larger screen iPhone is very badly needed and there is clearly an unaddressed market segment clamoring for a cheaper iPhone. When they finally do respond (hopefully this year) Samsung will never again be more profitable and will lose the market share game too. Those scumbags.
Baloney. Apple responded with the iPhone 5, and Samsung’s Galaxy S4 has been a sales disappointment.
“Many of us have been screaming for years that a larger screen iPhone is very badly needed …”
Ridiculous. I’ve seen the humongous, bloated Android phones, and Apple does not need to follow this stupid, stupid path.
People buy these huge phones because they’re cheap and that’s what they’re offered. People are *not* screaming for them.
Speak for yourself. I’m sick of how small the iPhone screen is. I hate using my smartphone for the Web. It’s just cramped crap.
I want a WIDER screen. It doesn’t have to be that much wider. But give the pixels some air. The iPhone 5 is too long and skinny.
With the right design, Apple can pull it off. Something really thin and rounded that lends itself well to a slightly wider screen where you don’t even really feel that it’s wider. Get rid of the crap 90s bezels on the top and bottom and you could have a smaller iPhone with a larger screen. Then we could dump that hideous home button for good and move to clean gestures and total simplicity.
“With the right design, Apple can pull it off. ”
A bigger screen for a pocket device is a marketing feature. Not a technical feature. . Samsung could not make a smaller screen phone and have the battery life match the iPhone’s. The bigger screen allowed Samsung to put a bigger battery in the device and they spun it as innovation.
Miniaturization is not easy and that’s what Apple does. They were the first ones to come up with the guts behind the screen in desktops. They did this over five years before anyone else.
And according to research, large screens phones are only about 5% of all smartphones sold. Why would Apple do this? Want a bigger screen? Buy an iPad mini!
There’s an easy fix for your problem – browse in landscape mode.
Apparently you’re not aware of Apple’s attitude about listening to customers in order to design products. Apple doesn’t ask customers what they want. They give them products they didn’t know they needed, but can’t live without.
Where did SA get the 4.6 Billion number from? I didn’t see where Apple broke out operating profit on any of their reports…
Let’s just pull a number out of our ass cheeks.
Strategic Analysts published a paper a few months ago explaining how they had improved efficiencies in their Offices. They removed all chairs, their employees are now required to stand while working … thus making it easier to pull their research out of the asses!
Just be fair , should compare the quarter each company launches their flagship smartphone like compare Samsung s4 launch quarter and Apple iPhone 5 launch quarter . So compare by year .
I mean or compare by year
There’s not even a need to compare overall profit from mobile. Samsung sells cheap “feature phones” which no doubt accounts for a large percentage of overall profit. Apple does not go there, as a strategic choice.
The fact that Apple can match Samsung on overall profit from mobile, in the quarter that is usually the slowest for Apple with iPhone sales, with essentially three models of iPhone, shows how strong SMARTPHONE sales are for Apple. And how much profit Apple makes per unit sold.
Things change. We’ll see this fall if Apple can bring something to the table? Competition (honest or not) is good. Could be the calm before the storm? Should be clear by Christmas. Ho Ho Ho!
I like my iPhone 5 but I won’t be upgrading until Apple releases a larger screen iPhone.
I have no interest in Google’s spyware, virus laden Android. But I sure like the screen on those Samsung 5 inch+ phones.
Who wanted malware!. I know I don’t therefore I stick with Apple.
” But I sure like the screen on those Samsung 5 inch+ phones… ”
I don’t. They look ridiculous and unwieldy. I do not want to see Apple follow this ridiculous path of humongous screens – it’s crazy.
not only that, samsung screens are not color corrected, have you seen photos displayed with those screens? they look awful! Cheap pieces of crap made by a crap phone making company!
Why the denial? Because Apple doesn’t make a larger screen iPhone all the other manufacturers who do are stupid? What are you going to say when Apple increases it’s screen size? I’m sure you’ll find a way to justify it then. Of course people want a larger screen iPhone. Why do fanboys make excuses for Apples’ miscalculation on screen size? Jeez!
Miscalculation? You were sitting in the product development meeting where the design strategy was discussed? Those large screens are less than 5% of all smartphone sales. I’d say it was an informed decision not to make them.
I work in the technology education field. Large screen phones are showing up more and more frequently. Clients tell us that the larger screen phones allow them to use one device instead of two.
I personally am not interested in an Android device. I value my privacy and security. Google values neither. In spite of this, I have noticed more and more Mac users now carrying around large screen Android phones.
Why are they using an Android device when they have privacy and virus issues? I receive two reasons:
Screen size
Not aware of privacy issues and viruses on Android.
Apple should revive the Mac / PC commercials. Substituting iPhone / Android devices in place of Macs and PCs. These would educate users to the dangerous side of Android in a humorous way.
Second, I think Apple should make two screen sizes for the iPhone like they do for the iPad.
Don’t leave competitors a crack to establish themselves un-attacked.
Get an iPad mini as your phone then. Any time I have seen someone use it, I think it just looks sooooooo stupid! It is like talking to a small cookie platter.
Samsung is running android!!!
The US government must be so proud!
When (ok, IF…) Samsung pays the 1 Billion dollars damage to Apple, then it will be a 2 Billion dollar profit swing The Apple profit side of the balance sheet, right?
As I’ve been watching things over the last year or so, it appears that Apple has had some difficulty transitioning from the SJ era. Products have not been smoothly and well transitioned. For example, the iPad Mini, which debuted in March should be on a fall release cycle with more memory, and a retina display. Macbooks and iMacs should be seeing faster refreshes with new models and designs coming again by next summer. iPhone5 should be out by fall, but it sounds now like it won’t be. As for phones, Apple probably at this juncture should have more than one design in the marketplace. I’m not sure they need a cheaper phone. Who want’s less than a full featured smartphone. So, a higher profit, maybe larger model would be nice, but again, what are customer needs. Apple has always been good at establishing market sectors then expanding them. Right now, it appears that they seem to be a bit lost with the question of what to do next for phones. I’m not sure Samsung actually has the answer, but they merely offer an alternative with both cheaper and bigger units.
All I can think of that Apple is doing with all of this time on their hands and little product announcements in 2013 is growing internally. Like trying to tie and tidy up both iOS, OSX, and iCloud going forward. Sort of like they did with OSX Tiger. Taking a long time to clean up and get things working really well and improving their internal operations. If that is the strategy, I’m fine with that alone, but my confidence is not there as it was when SJ was at the helm and they seemed to be firing on all cylinders quarter-after-quarter, year-after-year.
maybe Apple is cleaning up the mess, i mean loose threads , that Steve Jobs left behind – while he was sending product after product out the door….just saying…
Steve Jobs sometimes misfired. Certainly, the Cube is one misfire. But more recently, MobileMe, a service that cost $100/year, and which I really liked. However, I remember Steve apologized for what he deemed a ‘poor rollout’, and giving everyone credit for a free year of service. Not to mention antenna-gate and other stumbles. It hasn’t changed my faith in Apple, nor has the past year’s product releases. I’m willing to wait for them to release products, only when they are ready for the millions of devoted customers. The customer base has grown substantially since Steve passed, and releasing new hardware and software to the ecosystem takes enormous effort and synchronization on Apple’s part. I agree that Apple is certainly working on internal operations to assure a smooth launch of the new hardware/software this Fall.
And it’s just possible that Apple is delaying truly radical new products until it does not have to rely on Samsung to build them or supply parts, only to have Samsung then rip off the designs and functions.
Exactly, Zeke.
Samsung siphoned the cream from Apple and was positioned to keep doing it, counting on contracts in place at the time and the inferiority of rivals’ production facilities.
Apple had to honour the contracts, but litigated and started lining up new partners anyway, and delayed new product intros, upsetting their product cycle and getting sideswiped by Wall Street in the process.
To this day I believe Apple made a strategic calculation to take damage in the short run in order to gain more autonomy, which would pay off in the long run.
If I’m right, then Tim Cook is a better chess player than Steve Jobs. A queen sacrifice (tantamount to giving up profit share to a rival) always shocks the kibitzers but usually marks the player as one possessing not only a penetrating mind, but a character ruthless and calmly expectant of deadly success. That kind of mind is also impervious to brickbats thrown from the peanut gallery.
Very nice analogy.
DOJ is doing a great job destroying Apple!
Didn’t they learn anything from previous years?
When new iPhone is on the horizon, sales of the current model slow down.
Thanks Google for giving away the profits of one of America’s greatest innovations to a foreign country corporation! Great Job!
Operating profit my ass. Samsung spent over 2 billion on phone adsverts alone. Lets compare smartphone profits. Apple doesn’t make feature phones.
Before cost profits are not profits by any means.
“‘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.’” – no it isn’t.
‘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.’”
A better retort would be…
How is launching a cheaper phone (with absolutely lower margins) going to “recapture lost profits”? Margins will go down–way down. Even if sales do go up (a possibility) the cheaper phones will cannibalize the high end phone sales thus further eroding margins and profits. How is significantly lowering margins going to “recapture lost profits”?
These idiots are not proposing that Apple provide a lowER cost iPhone. They are proposing that Apple provide a CHEAP iPhone. The only time Apple joined the “race to the bottom” it almost bankrupted the company. (Remember the 101 variants of the Performa and Centris lines and how such stupidity almost sunk Apple?) Apple is extremely unlikely to get into an outright price war on cheap phones with any of its competitors.
Apple is making more money on smartphone sales than anyone else. Apple is not making more money on overall phone sales than anyone else. Anyone saying otherwise is either a fool or is knowingly lying.
Comparing the slowest quarter of apple to samsung quarter with new s4 release… Is absurd
How about ttm profit. Samsung 22.7 b.. Apple 38 bil.
Apple profit margin 24% …samsung 12%
To cherry pick ( rather extract) a number from samsung report (which does not itemize its report)to make samsung look good Is the work of only one type of analyst.
A samsung btibed misinformer !
What’d you expect? Apple technology just works, no matter who’s brand you put on it.
You use the quarter when people are expecting iPhone 5s to compare with Samsung most profitable quarter in which s4 launched ? It is unfair .
Apple is in control. Bottom line. Putting out new products as often as possible is not a strategy. The Porsche 911 series is the best example of this. It hasn’t been very broken so not very much has been needed. Design changes should only be done when needed. New technology is encorporated by Apple when developed and they are the leader not the follower in this area. I would prefer to see a cheap large plastic device overtake overall sales while Apple maintains a quality design goal with innovating technology with each release. Once Apple abandons this idea, the magic of Apple would be lost and they know it. Companies come and go and they usually go when they get cheap and lose sight of quality. Unless, of course, idiotic bailouts happen. Then they stay with their failed products!
With Apple as Sumf*ck’s unofficial R&D Dept., of course, Samf*ck save shit load of $$ (excuse my language, sorry) thus increase its margin and profit accordingly.
“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 …”
Under “intense pressure” from? I honestly don’t think Apple really responds to pressure.
While I know there are consumers that want larger/smaller screens or cheaper phones, why are those the only possible remedies to increasing iPhone revenue? Because tech pundits see those and assume they are the difference in revenue? Also, is handset revenue worth chasing at the expense of revenue from those that have handsets?
From what many have speculated and from what Apple has said, they will roll out smaller or larger screen iPhones when and only when they can assure that user experience is not affected by multiple screen sizes and that developers are not punished by it.
I came to this late, wondering what all the panic was about. So I read this entry. Samsung is now the most profitable “handset” maker. Not “smartphone”. “Handset”. Correct me if I’m wrong, but doesn’t Samsung still make feature phones?
——RM
I’m glad you asked. Indeed, Samsung’s line of Hello Kitty phones continue in popularity, particularly the pink models. They also do a smashing business in Hello Kitty cases and other accessories for non-Hello Kitty phones. They also make mine detectors and washing machines.
Who Cares if Samsung is slightly ahead?!
are you not sick of journalism & bad reporting?!
there’s conflicting reports all the time. not monthly/weekly. every minute there’s an article out there it seems, that claims Android is on top, then Apple, then Android, then…who knows the truth as fact anymore?! it’s so frustrating to read anything out there. it’s 24/7 B.S.
the only thing one can see as fact is that most people you see in the streets have iPhones. those who have Androids are frustrated and many are smart enough to give it up for iPhones.
then, even if the cnet report is factual, that Samsung has $5.2B vs Apple’s $4.6B profit how do you know how truthful Samsung’s claims or accounting is?! it’s close. so maybe Apple is equal or more profitable.
anyway, Samsung has to sell many more phones to reach those numbers than Apple, so, the per-phone profit is much higher with Apple! it’s all relative – how you see & interpret headlines!
in the end, iPhone is the winner, as there is no way Android can survive with its chaos or be profitable & sustainable.
y’all need to read this before you get your panties in a bunch:
http://tech.fortune.cnn.com/2013/07/28/apple-samsung-profits-dilger/
tech.fortune.cnn.com/2013/07/28/apple-samsung-profits-dilger/
SUMMARY CONCLUSION
Strategy Analytic’s article was poorly researched resulting in wrong conclusions. I’d call this both INEPT and IRRESPONSIBLE journalism. The fact that their poor article was allowed to be published is well worth getting anyone’s panties in a bunch.
As most of us here at MDN know, poor journalist coverage of anything Apple is nothing new. In particular, I can’t help but note that the quality of technology journalism as a whole is in decay.
Here is Dan Dilger’s extremely detailed analysis of ALL the data with actual factual, responsible, intelligent conclusions:
http://appleinsider.com/articles/13/07/27/samsung-has-not-dethroned-apple-in-mobile-profits
MDN’s coverage of Dan’s article is here: