Counterpoint Research has released a new report analyzing global smartphone operating profits and revealing several interesting shifts in the market. More directly, the market research firm reportedly suggests that Apple’s current lead over Samsung, in terms of its share of operating profits, may be a matter of product pricing. Meanwhile, Chinese manufacturers are surging forward despite being sold at a much smaller profit margin and that could signal a shift in the overall market over the coming years.
By the numbers, Apple managed to capture 59.8-percent of the operating profits from the global smartphone market. That number is actually down from the previous year – falling from 85.9-percent – but is despite the fact that Android dominates the overall market for smartphones. In fact,as of Q1 2017, Android held approximately 85-percent of that market. Meanwhile, Samsung took no less than 25.9-percent of the global total of operating profits from smartphone sales. As alluded to above, the discrepancy in the figures, according to the market research firm, appears to be the result of the profits each company is able to make on each individual device. In Q3 2017, for example, Apple was collecting a profit of around $151 per iPhone sold while Samsung was only bringing in around $31 per smartphone. That is around five times more profit per unit sold than Samsung collects. At the same time, Samsung actually reports among the highest profit margins amongAndroid manufacturers. By comparison, Huawei brings in around $15 per unit sold, followed by Oppo, Vivo, and Xiaomi at $14, $13, and $2, respectively.
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Bearing that in mind, that doesn’t mean that those Chinese manufacturers
should be counted out. Over the course of Q3 2017, the combined operating profits of those OEMs surged to $1.5 billion despite that some individual companies saw operating profit share declines just a year earlier. While Huawei’s share of the profits rose during the third quarter of 2016 from 3.3-percent to 4.9-percent, Oppo and Vivo’s share fell by 0.2-percent and 0.6-percent respectively. Counterpoint Research suggests that growth could signify a shift in market dominance over the coming years, despite that Chinese-manufactured devices are selling at considerably lower profit margins than the competition.