Apple’s 20% global smartphone market share translates to 92% of profit

Photo ©2015 by Steven Sande. All rights reserved.

Photo ©2015 by Steven Sande. All rights reserved.

Apple may only sell two out of every ten smartphones sold worldwide, but the company captures the vast majority of operating income in the global smartphone industry. That’s the word from Canaccord Genuity, which showed that Apple grabbed 92 percent of the total operating income of the top eight smartphone makers in the first quarter of 2015. That’s up from 65 percent last year.

Given that many of the thousand or so manufacturers that make smartphones either broke even last year or lost money, Apple and Samsung — which pulls in another 15 percent of the profits — account for more than 100 percent of industry profits.

A number of signs point to this continuing for the foreseeable future; the iPhone sells for a global average price of $624, compared to $185 for Android smartphones. Apple is expected to put in a record order for the rumored iPhone 6s to be released this fall, while Samsung manufactured too many Galaxy S6 phones.

In a Wall Street Journal post about the disparity in profits in the smartphone industry, former Verizon COO Denny Strigl noted that “The dominance of Apple is something that is very hard to overcome. Apple has to stumble somehow or another, and I don’t think that’s going to happen.”