How Apple, Inc. went thermonuclear on Samsung, erasing Android’s primary profit center

“After failing to do much more than embarrass Samsung Electronics in years-long legal battles over patent infringement, Apple has rapidly obliterated Samsung’s mobile division profitability, rendering it as barrenly unprofitable as every other Android or Windows licensee with razor thin margins in the phone, PC and tablet market,” Daniel Eran Dilger reports for AppleInsider.

MacDailyNews Take: An iPhone with a larger screen option will hurt Samsung immeasurably more than myriad, unending traipses through the legal morass.MacDailyNews, May 2, 2014

“While Apple’s critics might prefer to credit Xiaomi for Samsung’s decline, the South Korean giant’s plummeting profitability is not due to a major drop in its low priced, high volume phones and tablets but rather an implosion of Samsung’s profitable, high end Galaxy S and Note models that directly compete with iPhones,” Dilger reports. “Earlier today, Samsung announced an incredible 73.9 percent drop in its mobile division profits for Q3. Analysts have been noting through 2014 that the company faces increasing competitive pressure from both Apple on the high end and from high volume sales of lower end models increasingly being produced by Chinese companies, in particular rising star Xiaomi.”

MacDailyNews Take: Xiaomi makes Samsung look like original thinkers. So, as with personal computers, the only companies having any success are the innovator and those who steal IP and knockoff the innovator’s products.

“Samsung is clearly facing a battle on both fronts. However, based on the numbers the company has reported, the catastrophic drop in profits Samsung suffered in the third quarter has come from a thermonuclear assault by Apple targeting its core revenue and profit generators,” Dilger reports. “Further, the damage Apple caused Samsung will only get worse for the company as its remains are ravaged by other Android licensees.”

Much more in the full article here.

MacDailyNews Take: Couldn’t happen to a more deserving company. Stay warm and toasty now this holiday season, Samsung!


Related articles:
Samsung looks to cheap phones to stem steep profit decline in face of Apple iPhone 6/Plus – October 30, 2014
Samsung Electronics’ profit plummets over 60% as people dump wannabe iPhones for the real thing – October 30, 2014
Apple getting last laugh as Samsung earnings implode – October 7, 2014
Samsung poised for ‘ugly’ quarter as demand for Apple’s bigger iPhone 6/Plus skyrockets – October 6, 2014
Serial copycat Samsung takes South Korea’s stock market down with it – October 3, 2014
Survey: 27% of consumers ditching Samsung phones for Apple iPhone 6/Plus – September 23, 2014
Apple’s 64-bit iPhone 6/Plus fueling mass upgrades from Android – September 18, 2014

Apple posts new how-to guide: Switching from Android phone to iPhone – September 16, 2014

Reviewers fall all over themselves to praise Apple’s 64-bit iPhone 6/Plus – September 17, 2014
iPhone 6, iPhone 6 Plus tested at Disneyland: ‘So badass’ – September 17, 2014
Re/code reviews Apple’s 64-bit iPhone 6 Plus: ‘A statement phone,’ not a ‘plastic toy’ – September 17, 2014
Megapixels mean nothing: Apple iPhone 6 trounces Samsung Galaxy S5 in camera shootout – September 17, 2014
The Telegraph reviews Apple’s 64-bit iPhone 6 Plus: ‘It’s peerless’ – September 17, 2014
TechCrunch reviews Apple’s 64-bit iPhone 6: ‘The best smartphone available’ – September 17, 2014
USA Today’s Baig reviews Apple’s 64-bit iPhone 6/Plus: ‘Smartphone stars’ – September 17, 2014
Walt Mossberg reviews Apple’s 64-bit iPhone 6: ‘The best smartphone on the market’ – September 16, 2014
The Wall Street Journal reviews Apple’s 64-bit iPhone 6: ‘The best smartphone you can buy’ – September 16, 2014
Macworld reviews 64-bit iPhone 6 and iPhone 6 Plus: Bigger is better (in the right hands) – September 16, 2014


  1. I love this so much.

    It wasn’t said, but is important to note, that by Apple allowing Samsung to grow to the size it has, the total assault on their highest margins leaves Samsung in a worse position than if they were smaller, with fewer manufacturing lines, marketing and sales teams, and the like. Allowing Samsung to grow fat makes the fall all the harder to recover from.

    1. Interestingly, my friend who works in a store that sells ranges and refrigerators says that Samsung’s refrigerators break down at a very high rate compared to other brands.

  2. HTC made profits of $0.6 billion last quarter. That was after losing almost $4 billion in the same quarter last year.

    This guy, Daniel Eran Dilger, has been claiming that Android will fail for years. As recently as 2 years ago he predicted that lawsuits and poor sales would force Google to abandon Android entirely. He was also claiming that Google was not making any money off Android as late as a few months ago and it was a failed strategy, and that Samsung was the only ones making money off Android. Now, with the Google Play Store posting revenues of ONE BILLION DOLLAR PER QUARTER this year and growing quarter/over/quarter by 50%, he has shifted to “only Google is making money off Android.”

    And now with Lenovo buying Motorola, they are the #3 player after Apple and Samsung. Lenovo will get Motorola’s great phones like the Moto X and Droid Turbo, and unlike Motorola they will not fail utterly at marketing and distribution.

    So right now, the only Android manufacturer that is losing money is Sony (and Sony is having major problems top to bottom). The rest are increasing sales, revenue and profits. Even the new Android One manufacturers in India, Spice, Micromax and Karbonn, are making profits, are going to be adding more devices to their lineup they are going to be joined by HTC, Lenovo and Acer.

    Basically, everything this guy says is false. Samsung is declining, but everyone else (but Sony) is increasing (despite the insistence on claiming that only Apple copiers Samsung and Xiaomi are selling … Xiaomi does not even sell devices outside of China and India).

    And this fellow makes Andy Rubin leaving a big deal … Rubin has not been in charge of Android since 2013. Sundar Pichai has been, and Google recently made Sundar Pichai the leader of ALL of Google’s products (taking over that role from CEO Larry Page) which means that Android will now be the center of ALL that Google does going forward (Larry Page explicitly said so).

    And the copycat thing … let it go. Apple has spent the last 2 years copying Android, while Android has not added one single thing in return. The reason is that Google is taking Android in a totally different direction and there is nothing that iOS has that Google wants (except better third party apps). Material Design is a major differentiator in terms of not only look and feel but usability (because it is designed around multi-tasking and on continuity with every device that runs a Chrome browser, including ChromeOS) and that is what is going to mark Android going forward. That will make Samsung even less attractive because TouchWiz is going to continue to try to emulate the iPhone, and despite what you guys are intent on believing, most of Android’s customers (especially in the U.S) buy Android phones precisely because they do not want an iPhone. Not because they can’t afford them …. a flagship Android phone costs as much as an iPhone, and you can get an iPhone 4 or 5 subsidized by a carrier to the point where you pay almost nothing up front. It is because they don’t want one, and after Lollipop even fewer people will want a Samsung TouchWiz phone.

    You guys can believe what you want, but you will not be able to dispute quarterly sales figures. Including the last quarter’s sales figures that showed that Samsung and Sony were the only major Android OEMs to suffer declines in sales.

    1. RE: “HTC made profits of $0.6 billion last quarter.”

      You forgot to mention in your comment that the number you refer to from the article you linked from is New Taiwan dollar values. American dollars would translate to HTC making $20 million net profit compared to Apple’s 8.5 BILLION net profit. HTC net profit was less than a quarter of a percent of Apple’s.

      In other words, comparing HTC’s profits to Apple’s is a joke you’re making that you don’t even comprehend.

      (Nice try.)

      1. “in other words, comparing HTC’s profits to Apple’s is a joke you’re making that you don’t even comprehend.”

        No, that is the same point that you guys make.

        First, you claim that Android guys aren’t making money. When pointing out that Android guys aren’t making money, you shift the claim to “they are not making as much money as Apple”. Which was never the claim.

        Dilger’s thrust – as always – is that Android will fail because the OEMs are not making money. Not that they are not making as much money as Apple. But not making money PERIOD. Going from losing $116 million to making $20 million is significant for HTC. And HTC sells less than Lenovo and LG.

        And if you want to play this stupid game, “LG’s mobile handset division turned in a 167 billion won third-quarter operating profit, its highest since the third quarter of 2009. Smartphone shipments hit a record 16.8 million units, thanks in part to strong shipments for the flagship G3 smartphone.”

        That is $156,228,500 bucks. That is HUGE for a SMALL COMPANY like LG. It means that Android phones were 36% of LG’s quarterly profits.

        Here is the reality: Android now has two PROFITABLE large players in Samsung and Lenovo plus HALF A DOZEN PROFITABLE small players in HTC, LG, Huawei, Oppo, Asus and Acer. I am only including the people who make Google phones, not AOSP or forked players like Xiaomi and Amazon. And I am also not including the “budget” makers like ZTE, Kyocera and the Android One makers.

        Sorry guys. Competing with Apple is not necessary. All that is necessary for people to make profits and continue to be able to work on good design, and as Android is more software driven than hardware driven, the expensive hardware R&D that Apple does is not necessary on the Android platform.

        1. Let’s see, lost $116 million, gained $20 million.

          Even a door knob like you must realize that is $96 million in the hole. Add that to 8 more years of losses and HTC is in a real big hole.

          Let’s not call HTC a money maker just yet.

        2. Mr. Altman, please don’t embarrass yourself. If i lose 4 bucks one day and make 0.2 bucks the other day, i would be a very sad man. And it would mean that my company is not making any money but losing it.

          The conversation is samsung lost about 60 to 70 % of it profit for Q3 and it will be hard to recover from the drop. Plot the graph and you will know where it is heading.

          And please, Companies don’t last years by making meger profit. Look at the size of HTC, its close to 6 billions, its not small. A company like that making 20 million is not good even is the HAPPIEST of time.

      2. >>HTC made profits of $0.6 billion last quarter. That was after losing almost $4 billion in the same quarter last year.

        They lost 4 BILLION in one quarter, and the fact that they made 60 MILLION this quarter means they’re profitable? It’s gonna take quite a few quarters at that speed to erase that bump in the road.

        >>most of Android’s customers (especially in the U.S) buy Android phones precisely because they do not want an iPhone. Not because they can’t afford them

        Are you f’ing serious? The Android phones that are selling are not the high end phones, they’re the cheap ass POS 3 for one deals. To people that can’t afford higher end phones.

        Don’t get too comfortable as a Samsung shill. They won’t be able to pay you for astroturfing very much longer… How’s your Chinese? I hear Xiaomi may need some folks with your skills.

    2. Yo Bozo, I’m calling Bullshit!

      I have an iPhone 6 in my Jacket pocket and a Google Nexus- the pure unfiltered Android sitting in my desk drawer. I know for a fact that what you contend regarding apps and the OS are simply untrue.

      I have the VERY SAME APPS from the same developers running on the latest versions of BOTH OSes on the reference platforms so let me tell you what the truth of the matter is:

      1-The same apps do not run as well, are not as stable and often not as feature rich on Android as on iOS. Repeat- the same apps do not function as well on Android. This on the same networks WiFi and Cellular (AT&T).
      2-The Phone radio in the Nexus is not as good as any iPhone I have ever owned- again on the same network. The basic functionality of making and receiving calls on the cell network is inferior on the Nexus. Data is even worse. Apple invests a lot of money getting the basics right and the LG phone that is the basis for the Nexus does not.
      3-The basic functionality of routine tasks is less intuitive, more cumbersome and less fully featured on Android. The stupid changes introduced with iOS7 are a step backward, but iOS is still superior.
      4-No Android phone can match an iOS device for Total Cost of Ownership. I can sign a contract with a carrier, use the phone for 2 years, sellout for more than I paid for it and get another phone. Gazelle will give you about $25 for a Nexus phone maybe $50 for a Galaxy. Talk about a tax- the iOS device retains it’s value while the Android costs you money.

      Android features:
      Shittier Phone with poorer phone performance.
      Shittier and less stable apps.
      Less powerful and intuitive OS.
      Higher Total Cost of Ownership.
      Uglier damn plastic phone.
      Less secure.
      Less fully featured.
      Far less battery life.

      I have owned and used the Nexus for well over a year now and on it’s best day is not better than any iPhone.

      As the ads used to say- ask the man who owns one. Well I own both and the Android is inferior by any reasonable standard.

      1. And I am calling the same on you. I currently own two Android phones, a Samsung mid-range phone and a budget Kyocera Phone. They both work every bit as well as the iPhone 4 that a family member of mine has. So does the outdated Samsung Galaxy S3 that a relative of mine has. And these are outdated mid-range/cheap phones. Lots of my friends and coworkers have the Galaxy S4, the Galaxy Note as well as phones from Motorola, LG and HTC AND THEY WORK GREAT.

        I am sorry, but all of the Apple fans who claim to own or have owned Android phones and claim that they perform poor, are unstable, have terrible battery life etc. ARE LYING. I repeat: ACTUAL ANDROID USERS LOVE THEIR PHONES. THE APPLE FANS WHO CLAIM TO BE ANDROID OWNERS ARE LYING.

        Also, it isn’t as if we can’t go to tech websites where these phones get reviewed. EVEN THE DIEHARD APPLE FANS ADMIT THAT THE LATEST ANDROID PHONES ARE GOOD. The main tech reviewer – an iPhone fan and owner – for Forbes called the Moto X the best Android phone released in 2014 (when including all variables including performance and cost). A guy for ZDNET who switched from a Galaxy Note 3 to an iPhone 6 Plus (stating that he preferred Apple but only went to the Note starting with the Note 2 because he needed a bigger screen), calling it the best smartphone that he ever owned, gave the iPhone 6 a 9.5 out of 10 and the Galaxy Note 4 a 9 out of 10 (stating that he gave the Note 3 a 9.5 out of 10 last year).

        So seriously guys. Stop all the lies. You aren’t fooling anyone but yourselves. The Galaxy Note actually costs more than the iPhone (the Galaxy Note Edge is rumored to be $1000 off contract) and people would not buy them if your false claims were anywhere close to true.

        1. You’re the second phandroid to think that android performs as well iOS by comparing it to an iPhone 4. Stupid comparison, iPhone 4 performance is nothing to brag about. 4S+ kills android.

        2. Last December 2, I was hit by a Senior Transit Van within the city limits of a small town at the junction of 2 US highways. I had the Nexus with me and got 1 bar to zilch on the AT&T network. If I so much as slightly turned my head the signal would drop. The same spot on the same AT&T network shows a better than 75% signal strength.

          Fortunately, I had 2 LTE hotspots with me and called with the TruPhone VoIP app on my iPad. I made my calls to 911, the Insurance Company and roadside assistance with the iPad as the Nexus was a worthless piece of shit.

          I drive that approximately 100 mile route weekly and NEVER get a data drop out on streaming audio with my iPhone or my previous iPhones. I get numerous drop outs with the Nexus- every time.

          The TuneIn Radio app that works flawlessly on iOS devices is less stable and will not recover automatically from a data drop like it is supposed to. I have repeatedly seen the Nexus drop data passing so close by a tower that I could have thrown the phone and hit it. This kind of second rate performance is what I have come to expect from Android gear.

          After the mess with the Nexus, I always carried either an iPhone or an iPod Touch with TruPhone and a hotspot as a backup and to use for streaming audio.

          I work for a Hospital Chain, we have thousands of employees and EVERYONE has and depends upon cell phones. Hospitals do not close due to in climate weather and we must drive in conditions most people would be afraid to- having a good cell phone is not an option. When you are on call there are no excuses for second rate shit and make no mistake- Android is second rate.

          The balance between Android and iOS is about 90% iOS and 10% Android- it used to be about 60-40. The Android users got tired of second rate performance and have continued to switch despite the cost of switching phones and buying all new apps.

        3. My S4 (work phone) is crap. For one, the stock camera app closes every time the phone is rotated from landscape to portrait or portrait to landscape. Very, very annoying.

          Apps and access is puzzling. Why does a fart (used as example) need access to contacts, microphone, camera, gps, names or wifi networks, etc. I end up searching for apps that require the least access because the user has no control once installed.

          With Google you are the product.

    3. Anyone in their right mind would have predicted 2 years ago that Android would fail due to lawsuits, and, had Eric Schmidt not become Washington’s whore during that period, it would have happened. Nothing wrong with DED changing his position when Eric Schmidt changes Google’s position (to that of lying on their backs with their legs in the air). That said, I wonder what you’re doing on this site. Clearly Scamscum is not paying you. Is Google paying you? I’m not sure you’re adding any value to the conversation. Really.

      1. Except that Apple never actually sued Google over Android. They only sued Samsung. Apple has never stated that Android infringed on iOS, and they even specifically denied that position in their last trial against Samsung. Samsung’s defense in the last trial: we got those features from Android so they do not infringe. Apple never debated that point. Which was why the judgment against Samsung in the last trial was so small: less than $150 million.

        But keep the lies coming guys. They are plenty entertaining!

        1. re “But keep the lies coming guys.”

          Your posts are unutterably pathetic. I can see only two possibilities:

          1. You are being paid to spend your time writing this crap that will influence no-one. If that is the case, it only reinforces what sad scum Samcopy are.

          2. Or you are coming onto a Mac site to write this because it’s fun for you. If that is the case, I feel kind of sad for the incredibly empty life you must lead.

        2. Atlman is holding an iPhone thinking it to be an Android phone and hence his persistance to stress that its the best.

          Dont confuse him more with Oracle and Java and shit like that.

    4. You really do post crap don’t you! Your posts have been debunked enough to not bother again here but I have to wonder why you keep coming here and posting bullshit ?

      What’s the payoff ? Do you get off on winding others up or are you an apple-hater who just takes an anti-Apple stance no matter what facts are or are you being paid ? Whatever, you are an arsehole and a liar.

      Just fuck off and don’t come back

    5. “Google Play Store posting revenues of ONE BILLION DOLLAR PER QUARTER this year and growing quarter/over/quarter by 50%, he has shifted to “only Google is making money off Android.””

      It is possible that with Google Play, that Google will eventually make back all the money they sunk into Android. It’s a tough call, because you have to factor in what they had to give up in opportunity costs for working with Apple.

      I wold assert that Android is a net negative profit for Google based on: how much it cost to develop, market, and continue to support, how much Motorolla cost them to purchase and how much they lost on the eventual sale to Lenovo, and how much Google gave up in opportunity costs compared to what they could have made by not destroying their relationship with Apple.

      “You guys can believe what you want, but you will not be able to dispute quarterly sales figures. Including the last quarter’s sales figures that showed that Samsung and Sony were the only major Android OEMs to suffer declines in sales.”

      This is a completely irrelevant statement, no one has claimed that Android is not selling. The issue is whether Android is making anyone a profit. I could sell homes for $10 each, but that would not cover the cost of land, or the cost of construction materials, and many other fees. Sure my sales revenue would be huge if I could sell millions of homes for $10 each, but my profits would be negative billions.

      It’s well known that Android has a large percent of the market but it is also undeniable that it is nearly unprofitable. Samsung was the shining star making essentially all the profits. That has evaporated.

      You claim that Google is also making a profit. That may be so but this is after a long time of sinking in a vast amount of money and I think that after you factor in everything, Google actually has lost a lot of money on Android.

  3. The funniest part of this is Xiaomi stealing Samsungs low end customers while they spend billions in marketing with ads calling iPhone users wall hugging sheep, thinking it will make them convert. Now they are back to try and scrape up their cheap customers with even lower quality trash. Go back to refrigerators Samsung

  4. Wall Street will continue to value market share as the most important metric so I doubt Apple will come out with any advantage even with Samsung fading. The analysts were going giddy when Samsung outsold Apple’s iPhones by nearly 2 to 1 and were ready to announce the death of Apple’s iPhone business. I suppose now Wall Street will have to find some new competition for Apple’s iPhone to cheer about how they’re going to take down Apple.

    Wall Street will never freely give Apple the smartphone crown unless Apple outsells every other smartphone company on the planet and captures huge amounts of market share and I doubt that will ever happen.

  5. I would like to remind all, and DeD’s article does eventually wind up here, that Steve wanted to go thermo on Google for stealing iOS, not AssMung for stealing iPhone’s design, although I’m enjoying seeing things turn out the way they are.

  6. I’m no Samsung apologist and I hope they fail.

    But I will say that while Apple’s move into bigger phones did erase Samsung’s advantage, that effect may be ephemeral. I predict that Samsung will quickly release a 3.5″ and 4″ phone, which many users (including me) prefer, and get a good profitable hold on small phones. Watch for that in 2015. Samsung moves fast.

    Apple, not everybody has monster hands.

      1. Technically not hard at all. Strategically it would be difficult. They already had to take their lumps by effectively admitting that Samsung was right about the demand for big phones. To follow that by having to copy a Samsung move back into small phones would be painful for Apple. That’s why I’d make a 3.5″ phone if I were Samsung.

        But I hope they don’t do it because they don’t deserve success.

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