According to estimates published by BMO Capital Markets on Thursday, Apple captured 103.6% of smartphone industry profits in the third quarter of 2016, making it by far the most profitable company in the business. This represents a notable increase from the year-ago quarter where Apple had grabbed 90% of smartphones profits.
The Cupertino company managed to achieve this feat because of other smartphone players like LG, HTC, and Lenovo losing money. Samsung might be the world’s largest smartphone maker, but the company came in a distant second and accounted for only 0.9 percent of the total profit generated by the smartphone market.
Apple was No. 1 by a mile in smartphone operating profit in Q3. Among major vendors, Samsung was No. 2 in smartphone profits with a tiny 0.9% share, he said. Money-losers in the smartphone business last quarter included LG and HTC, Long said.
How can Apple get over 100% of the profits, you may ask? It’s simply that many smartphone makers actually lose money in the business. Any net loss from other vendors results in Apple being able to grab more profits than the global industry netted overall.
Samsung is among the very few smartphone OEMs in the market that still makes decent profits and is not scrapping by. However, the third quarter of this year was an exception for the company due to the unprecedented move of recalling the 3 million Galaxy Note 7 units it had sold thanks to faulty batteries. The Korean company also lost market share to Chinese OEMs like Huawei, Oppo, and Vivo that posted decent growth numbers due to the Note 7 fiasco.