No, Samsung has not dethroned Apple in mobile profits

“While a report by Strategy Analytics is getting lots of attention, its core implication that Samsung Electronics is now leading Apple in profits is simply not accurate,” Daniel Eran Dilger reports for AppleInsider.

“On Friday, Strategy Analytics issued a press release stating that ‘Samsung has finally succeeded in becoming the handset industry’s largest and most profitable vendor,’ according to its ‘latest research,'” Dilger reports. “Strategy Analytics has to employ ‘research’ to come up with this claim because Samsung doesn’t actually report how many phones, smartphones, tablets, cameras or set top boxes it sells (or even the inventory numbers it ships) and doesn’t report the profit share of any of these products segments.”

Dilger reports, “Strategy Analytics estimates that $5.2 billion of the $5.64 billion in operating profits Samsung reported for IM is non-network related, but this ‘mobile’ figure also includes all of Samsung’s Windows PC sales, Chromebooks and Galaxy tablets… Looked at honestly, Apple and the entirety of Samsung Electronics are both making nearly equal amounts of money, but Samsung is relying on much larger volumes of lower quality products to keep up… With Samsung sending out distress signals about the sustainability of its high volume, low quality business model for phones in a market where Apple continues to grow, Strategy Analytics’ creative accounting designed to award Samsung with an contrived achievement appears to be a distraction from reality, rather than real information.”

Much more in the full article – recommended – here.


    1. Yeah, it was pretty obvious they were just making shit up – none of their numbers made the least bit of sense. What was really amazing was how quickly that BS got picked up without a second of fact checking.

      1. For the talking heads, any thing NOT Apple is great news and the talking head cheerleaders push it as hard as they can. Truth and reality are really not part of their goals.

        They also are pushing bigger screens (that know one wants) and cheap crap iPhones and if it happens, Apple’s margins will tank and the quality will be lost. I am hoping that if the iPhone body is molded it will be with liquid metal not plastic.

        Extorsion money is paid in advertising dollars. Until Apple pays up for ads they will be trashed daily.

        1. Sorry, that is “extortion”. You know, BLACKMAIL. When Apple starts paying for ads again, they will move on. The boss will not want their customer to be pissed and cut of the cash flow again.

    2. I want SAMsung to continue spewing out this BS. Just like Ballmer spews BS about M$. At some point the rubber has to hit the road and the hit to the stock is much much larger when investors have to find out they have been lied to by their board of directors. And there legal issues that can come from that.

    1. The premise remains the same – Samsung is handing Apple its ass by stealing major portions of their profits and Tim Cook, operations genius, continues to buy billions of dollars worth of components from Samsung, has presided over a halving of the company’s share price, hasn’t announced Jack Shit for way too long — this whole year has been nothing but a boatload of “wait and sees,” “previews,” “pulling the strings,” and “coming later” bullshit — while holding Beer Bashes with Phillip Phucking Phillips.

      Show me the money, or get the fuck out, Timmy.

      1. Apple has shown the money and is doing very well. It has also shown the new products coming in the near future and has shown no signs of slowing down.

        Now you, who like companies that constantly release cheap products for cheap consumers have clearly no desire to use a superior product. You seem angry because you probably own something from these companies and I can understand your frustration.

        Sorry to burst your bubble but Apple is doing fantastic under Cook’s leadership and while Apple has historically had bums in the road, it hasn’t lost focus on what it does best.

        Hope you get over your issues and enjoy life for a change.

      2. @ Bagholder
        “…hasn’t announced Jack Shit for way too long — this whole year has been nothing…”

        You have my deepest sympathy. It’s REALLY disgusting and pathetic how Apple hasn’t transformed our lives for A WHOLE YEAR, now. I have moved on, and have found other ways to have a worthwhile, fun and rewarding life. I think you have better just do the same.

    2. @ macnut222 – I agree completely. MDN’s snarky take was basically an insult to the countless Apple employees who create the great products we use. As both a customer and stockholder, I have no problem with a Friday beer bash to reward their efforts.

      1. I’ll pile on. I’m disappointed that MDN didn’t include a take apologizing for losing their collective sh*t after that report came out. It’s awfully small of them.


  1. Glancing at the financial reports of the two companies (samsung is available in pdf form) a few days ago I too like many other apple fans realized that something was fishy with Strategy Analytics (or shall I say NON Strategy NO Analytics) report.

    that said a few points come up:

    1) it’s really scary how the press picked up on SA’s report WITHOUT FACT CHECKING. It was picked up and reported as fact by WSJ, BusinessInsider , Forbes, BBC etc. Some of these are business sites, surely they have journalists who are financially trained (like with accounting background) who could at a GLANCE realize that SA’s findings were wonky?

    Because it was announced so close to the release of the quarters financial results many CASUAL READERS assume that SA’s report was based on the numbers given out by the respective companies but of course it’s was just slanted estimates (neither company broke down Operating Profit by product).

    It’s it job of the Financial Press to accurately critic reports like SA but they are not doing it but merely promoting the report as FACT to GET PAGE HITS (i.e Press Whoring). Today newspapers like WSJ, NYT which one time were icons of news reporting are more like Check out Tabloids. (Publications with dwindling revenues are desperate for cash anyway they can… )

    2) we also know that Samsung has been putting out false articles, blogs, reviews etc against rival companies, hiring people to post on forums etc. In Asian they have been slapped by lawsuits by HTC for putting out fake reviews of HTC products and have admitted their guilt in the press:
    “The recent incident was unfortunate and occurred due to insufficient understanding of these fundamental principles .” (fundamental principles being lying in blog posts).

    Doubtlessly Samsung if doing it in Asia is also doing it everywhere else (it’s PR and ad budget is gigantic, much much larger than Apple’s worldwide) but Western firms (like apple , more below) do not like to ‘get in the gutter’ and fight Samsung’s shenanigans like a fellow Asian company like HTC. (I’ve worked for 10 years in Asia and business there is like the wild west, it’s WAR… )

    Doubtlessly many of the negative apple forums posting (maps , antenna gate etc) in ZDnet etc were fueled by Samsung (the number of posting of people who say they ” hate my iPhone because of the bad antenna’ don’t jive with the tiny iPhone return rate of 1.7% and fact that it won the JD powers award for Customer Satisfaction from a CUSTOMER POLL. As one investigator showed 50% of the posting on one site were probably fake. )

    Although unlike Samsung we have no concrete facts of Google doing press manipulations but please not that Google is largest financier via ad words for blogs (millions of them) and they have a wonky payment scheme and blog search rating …

    3) this confluence of
    anti apple press wanting page hits
    samsung etc using dirty press tactics
    hedge funds etc doing the stock manipulation of the ‘apple Sling shot’

    has resulted in a PR disaster for Apple (probably thousands more websites have SA’s false findings than Apple Insiders correction) and helped the stock tank from 700.


    LIke I posted before Apple’s PR is sadly lacking. For weeks NYT did their anti apple report (which eventually won them the Pulitzer) with slanted facts yet apple said nothing.

    I’m not saying top staff (like Ive) should waste time for PR but surely the biggest corp by market cap can HIRE a few PR dudes?

    for example when this SA report came out couldn’t they have said:
    “although we don’t release our operating profits per product we have to state that SA’s numbers for our iPhone line by simply dividing our profits in half is wrong. We can’t comment on Samsung’s numbers but looking at the SA report they have compared (estimated) iPhone earnings with the ENTIRE Samsung mobile line including laptops and tablets”.

    one paragraph would have done it.

    Because Apple does not defend it itself organizations LOVE attacking apple.

    That’s why it’s P.E is lower than Googs, Msft etc (low P.E is due to negative perception). When an analyst made a questionable call on RIM (like SA’s Apple report), RIM immediately contacted the SEC and the Canadian Government. Hate RIM all you want but I bet you analysts , Hedge funds etc have the fear of God put into them, yet hedge funds like Doug Kass’ manipulate apple like a yo-yo but apple does nothing.

    (for those people who have flamed me before and say that Apple SHOULD NOT BOTHER WITH PR – “marketing and PR is what the Pepsi Cola dude did” please note that since he was a teenager Jobs was a MARKETING AND PR GENIUS. He spent endless amount of effort building Apple’s IMAGE – see the amount of effort he put in building the best Apple stores (image), late nights with ad guys putting out campaigns like Think Different, Mac PC guy, getting on the cover of Time , Newsweek with personal interview etc … all Image and PR ).

    1. Interesting post, Anon C. Most of the time I subscribe to the belief that battling the mugwamps is a zero-sum game most likely to cover you in the very fecal matter that you are trying to refute. But I think there may, in fact, be value to a small group inside the Apple PR and marketing team – a “truth squad” – deals with stuff such as the Strategic Analytics report. It wouldn’t be necessary for Apple to respond directly to every provocation; “corrective information” could be fed to journalists, bloggers and analysts on a background basis, many of whom would jump at the chance to counterpunch without actually having to do the kind of work that Dilger did.

      Quite frankly, I think that would be a kind of a cool job…

  2. Dilger is like Apple.
    Apple has more innovation going than the all other phone makers and computer makers combined.
    Dilger has more research ability, thinking ability and ethics than most other bloggers/analysts/pundits combined.

  3. If corrections are not issued by the media, then odds are in favour of a conspiracy of some kind. If they are issued, but in an inconspicuous box below the fold, as if mumbled in a confessional booth, it means only that writers were cutting corners. Social forces are being exploited for market gains in any case, and a Pulitzer may await some clear-eyed investigative journalist with nothing to lose.

  4. Just bought a new MacBook Air, it is so cool, so light, so elegant, enjoy it so much and most of all NO VIRUS. Will load more AAPL in the near future.

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