Analysts: Apple and Samsung account for 100% of smartphone industry profits

We all know Samsung and Apple are the big dogs when it comes to selling lots of phones but nobody is saying they are the only players in the field. At least nobody besides the analysts at Cannacord Genuity.

According to their research, Apple and Samsung account for 100% of the profits generated by the smartphone industry in last quarter. Of course that's only in terms of manufacturing and selling devices; It doesn't take into account the carriers, retail stores, software developers and all the other folks involved in the smartphone ecosystems of today.

This doesn't really sit well with actual numbers from "reality" that show some other companies are making a profit, but these ancient astronaut theorists analysts also note that this an improvement compared to previous years when the two companies somehow accounted for more than 100% thanks to loses at competing companies such as Nokia and HTC.

According to Cannacord, Apple accounts for 57% of profits this past quarter while Samsung is now at 43%. Apple had previously accounted for 72 percentage points but Samsung is gaining fast as previous reports have already suggested.

Source: Cnet  | Image via Neowin/Tim Schiesser

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It's impossible to make more than 100% of industry's profits.

The only way I can rationalize this is if they mix together B2C with B2B. This way, you sort of get a double accounting problem cause you duplicate profits made by Samsung when it sells parts to Apple with Apple's profits from selling the end-products.

zhiVago said,
It's impossible to make more than 100% of industry's profits.

Sure it is.

The key insight is that profits can be negative. There are some years in which the low-cost carriers made more than 100% of the airline industry's profits, because the legacy carriers were all taking a loss.

It must be cool to have a job where you get paid to spew off BS. Companies like this should have their licenses revoked.

wearymadness said,
And the profit MS makes from each Android sale? That's 100% profit...right?

Yeah, the math is clearly incorrect on this one. lol

I mean, look at the prior year where they accounted for "more than 100% of the profit"... There can only be 100% of something. If other companies had losses last year, that's fine, but that doesn't diminish the total profit in the sector. That is just laughably false just from a mathematical standpoint (Ignoring the other glaring inaccuracies).

Profit = Revenue - expenses... Period.

M_Lyons10 said,

Yeah, the math is clearly incorrect on this one. lol

I mean, look at the prior year where they accounted for "more than 100% of the profit"... There can only be 100% of something. If other companies had losses last year, that's fine, but that doesn't diminish the total profit in the sector. That is just laughably false just from a mathematical standpoint (Ignoring the other glaring inaccuracies).

Profit = Revenue - expenses... Period.

Apple makes $100 in profit.
Samsung makes $100 in profit.
Sony breaks even.
HTC Loses $20.

That's $180 in profit 'across everyone'. Apple makes $100/180 of the profit = 55%. Samsung makes $100/180 = 55%. 55% + 55% = 110% of the profit.

I assume that's how the "math" lays out, in basic terms. Last year, other people "broke even or lost", so Apple/Samsung made over 100% of the profit. This year, the others more or less broke even whle Apple/Samsung continue to profit (Sony made $10 and HTC lost $10 leaving Samsung and Apple at $100 each, both making 50%.).

Made up numbers on my part, but that's how I read the numbers. Not rocket science, even if it's not how I'd ever interpret the numbers.

M_Lyons10 said,

...Profit = Revenue - expenses... Period.

Actually you're wrong. You've just described Net Income, not profit.
Consider the following...

Revenue
- Cost of goods sold
= Gross profit

Gross Profit
- Operating Costs
- Advertising Costs
- Depreciation & Amortization
- Interest Expense
- Tax Expense
- Other Expenses
= Net income

If you consider expenses, that net income, not profit.

ahinson said,

Actually you're wrong. You've just described Net Income, not profit.
Consider the following...

Revenue
- Cost of goods sold
= Gross profit

Gross Profit
- Operating Costs
- Advertising Costs
- Depreciation & Amortization
- Interest Expense
- Tax Expense
- Other Expenses
= Net income

If you consider expenses, that net income, not profit.

I highly doubt Cannacord got into the nuances of gross profit vs. net profit.

wernercd said,

Apple makes $100 in profit.
Samsung makes $100 in profit.
Sony breaks even.
HTC Loses $20.

That's $180 in profit 'across everyone'. Apple makes $100/180 of the profit = 55%. Samsung makes $100/180 = 55%. 55% + 55% = 110% of the profit.

I assume that's how the "math" lays out, in basic terms. Last year, other people "broke even or lost", so Apple/Samsung made over 100% of the profit. This year, the others more or less broke even whle Apple/Samsung continue to profit (Sony made $10 and HTC lost $10 leaving Samsung and Apple at $100 each, both making 50%.).

Made up numbers on my part, but that's how I read the numbers. Not rocket science, even if it's not how I'd ever interpret the numbers.

Yeah, it's a pretty stupid way of looking at the numbers. Consider this:

Company A: Loses $1 billion
Company B: Loses $1 billion
Company C: Makes $1 in profit

What percentage of the industry-side profit does Company C's $1 profit represent?

Completely idiotic.. how can Samsung and Apple make 100%.. that means they are the only ones selling phones.. completely nonsensical.. some of these analyst companies have trouble with math obviously or they are simply pulling numbers out of their ass.

There is no way in hell that Apple and Samsung make 100% of the profits.. It's utterly ridiculous.

Boz said,
Completely idiotic.. how can Samsung and Apple make 100%.. that means they are the only ones selling phones.. completely nonsensical.. some of these analyst companies have trouble with math obviously or they are simply pulling numbers out of their ass.

There is no way in hell that Apple and Samsung make 100% of the profits.. It's utterly ridiculous.


You are wrong. It means that only Samsung and Apple are actually gaining profits from their sales.
I can buy phones for $1000 each, sell them for $500 each, and I have sold phones and made no profit, not hard at all. You need to look over your math skills again.

Boz said,
Completely idiotic.. how can Samsung and Apple make 100%.. that means they are the only ones selling phones.. completely nonsensical.. some of these analyst companies have trouble with math obviously or they are simply pulling numbers out of their ass.

There is no way in hell that Apple and Samsung make 100% of the profits.. It's utterly ridiculous.


It's very easy. If all the other companies are losing money, then they're not making profits.
We're talking profits, not revenue.

siah1214 said,

It's very easy. If all the other companies are losing money, then they're not making profits.
We're talking profits, not revenue.

QFT

siah1214 said,

It's very easy. If all the other companies are losing money, then they're not making profits.
We're talking profits, not revenue.

It's even easier than that.

Some of the other companies can be making a profit. But others are losing money -- more money than the profitable companies are making.

Cyborg_X said,
maths

Indeed, 100% is a pretty strong number and unarguably false. This my friends is what we like to call complete crap.

ingramator said,

Indeed, 100% is a pretty strong number and unarguably false. This my friends is what we like to call complete crap.

Indeed. I appreciated the way Neowin approached this article though. It had a tone that they didn't believe it either (As opposed to running after every rumor as gospel)...

ingramator said,

Indeed, 100% is a pretty strong number and unarguably false. This my friends is what we like to call complete crap.

Not if everyone else handset business is making a loss or at break-even.

ingramator said,

Indeed, 100% is a pretty strong number and unarguably false. This my friends is what we like to call complete crap.

No it is not false. Try comprehending what you read. They said, Samsung and Apple accounted for 100% of the profits. Look at the numbers. HTC suffered a huge loss. Nokia also gained, but it was simply less of a loss than last year. Sony had never really been in the game, and Motorola had losses too. LG had some gains this year, but it was simply a little less of aloss compared to last year. But they still lost. Every phone maker had a nice income this year so far, but they all simply suffered less of a loss, but they still had considerable losses that sales didn;t overcome. Apple and Samsung had no losses and had huge profits to the tune of nearly $16B together.

In fact if you look at the numbers, every smartphone maker suffered a loss that wa sso big last year, that the gains they made this year were better than last year, but it was still a loss overall, becaus ethey didnt even break even. Thus Samsung and Apple are the only 2 OEM's thay sae hugh profits, and Samsung actually had a higher gain vs this same period last year, while Apple actually dropped in gains.

Learn to read with understanding. This isn;t that fanboy garbage where facts are subject to preferences and name calling. This actually requires thought.