Apple Takes 104% of All Smartphone Profits Following Galaxy Note 7 Recall
Apple accounted for over 100 percent of smartphone industry profits in the third quarter of this year, according to estimates published by BMO Capital Markets on Thursday.
Analyst Tim Long, quoted in the Investor's Business Daily, said Apple's staggering 103.6 percent profit share in Q3 2016 came largely as a result of significant losses posted by rival vendors including LG and HTC, and despite Apple continuing to shift fewer handsets year on year.
Based on units alone, Samsung accounted for 21.7 percent of all smartphones sold, with Apple coming in second with a 13.2 percent share. In terms of profits however, Samsung came a distant second to Apple, capturing only a 0.9 percent share.
Samsung ceded market share in smartphone shipments to Apple and Chinese vendors in the third quarter because of its Galaxy Note 7 troubles, Long said. He expects further share loss by Samsung in the current quarter. Apple captured over 100% of smartphone industry profits for the first time, thanks in part to Samsung's weaker results, Long said.
If accurate, the estimates represent the first time Apple has achieved smartphone industry profits of over 100 percent - an impressive number for a company owning only around 12 percent of the market.
According to the same report, Apple managed 90 percent profit share in the same quarter a year ago. However, this year Apple's iPhone 7 numbers were undoubtedly helped by Samsung's hugely damaging Galaxy Note 7 recall and discontinuation, which effectively took the South Korean company out of this year's flagship smartphone race, indicating Apple's profit share is unlikely to be sustained in the long term.
Despite the impressive numbers, Apple's recent third quarter financial results reported its first full-year revenue decline for Apple since 2001, although Apple expects to return to revenue growth in the holiday season on the back of sales of the iPhone 7 and iPhone 7 Plus.
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