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You are here: MacNN Forums > News > Tech News > Report: Apple, Samsung take 109 percent of smartphone profits

Report: Apple, Samsung take 109 percent of smartphone profits
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Nov 14, 2013, 04:08 PM
 
Samsung and Apple together combine to take in 109 percent of profits in the smartphone sector, according to a new report. Cannacord Genuity released a report this week saying that the two tech giants take more than all of the profits in the segment, a figure they arrived at due to the continuing operating losses of their smartphone industry competitors. Previous studies by Cannacord had Samsung and Apple combining to take only 100 percent of the profits in the segment.

Taken together, the two companies account for almost half of all smartphones shipped worldwide. The rivals reach that considerable figure from different paths: Samsung ships a wide array of phones with different price points and form factors, while Apple updates its offerings once per year with a new phone.

Apple continues to take in the lion's share of profits in the industry. Its iPhone pulled in 56 percent of Q3 '13 profits, up from 53 percent in the second quarter. The report predicts that strong sales for the new iPhones will likely only increase Apple's profit share compared to its competitors.

Meanwhile, their competitors' losses continue to mount. BlackBerry, LG, HTC, and Motorola continue to show operating losses as Samsung takes up most of the space in the Android segment, while Apple attracts most consumers that would be looking for a high-end smartphone.

Cannacord's report does not take into account the device sales of companies like Huawei, Lenovo, and ZTE. Those companies do not make their profitability data available, and so they could not be included in the analysis. [image via Phandroid]
     
hayesk
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Nov 14, 2013, 04:29 PM
 
*sigh*. No, Apple and Samsung took 100% of the profits. You can't "take more than all of the profits in the segment." The fact that other companies had losses don't magically give Apple and Samsung more profits.
     
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Nov 14, 2013, 08:35 PM
 
haystack:
Exactly right. This 109% is voodoo marketing BS that has no real world meaning.
Though I did not know the place, I set out for the land of my dreams
When I arrived at the land of my dreams, I found I did not know the place
     
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Nov 14, 2013, 08:43 PM
 
Samsung Profits at the expense of Apple hard work and development. Jeopardizing the 35 thousand Americans working at Apple right here in the USA.
     
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Nov 14, 2013, 10:53 PM
 
If these guys can't count up to 100 without goofing it up, can you really trust any of their conclusions?
     
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Nov 15, 2013, 02:47 AM
 
Yes, actually, you CAN take more than 100% of all profits. It works like this: some of the companies have negative profits, so they reduce the total which makes up "100%". Say there are 3 companies. Company A makes $64 million in profits. Company B makes $45 million in profits. Company C loses $9 million. The total profits are $100 million -- $64 million plus $45 million plus -$9 million. Companies A and B together made $109 million, which is 109% of the total profits. See?

Next time, read carefully before you submit a comment which makes you seem like an idiot, okay?
     
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Nov 15, 2013, 05:04 AM
 
Originally Posted by hayesk View Post
*sigh*. No, Apple and Samsung took 100% of the profits. You can't "take more than all of the profits in the segment." The fact that other companies had losses don't magically give Apple and Samsung more profits.
Every time this comes up, some Smart Guy needs to feel good about pointing out the middle-school rule that you can't have more than 100%.

And it needs to be pointed out time and again that this figure is a convenient way of including everybody else's LOSSES into a single, convenient number.

It's not that hard, really.
     
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Nov 15, 2013, 10:27 AM
 
And then some Smart Guy comes along and tries to change the definition of profit, to imply that loss is a part of the meaning. "Negative profits"...really?!

profit (noun)
a financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something
     
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Nov 15, 2013, 11:57 AM
 
hayesk is correct.

And frankly, he's correct not only because you can't have negative profit - it's also simply because the entire exercise is pointless.

Microsoft makes 2 billion from Android licensing, but that's not counted here. What's counted here is entirely a fiction designed to make you go, wow - Apple and Samsung are making money, and the others - not so much.

OK - you made that point, but now you say - the number has gone up to 109% - so now I have to call BS.

The overall point that Samsung and Apple are profitable - point taken. Saying the number has risen to 109% is such utter pointless nonsense, that nobody, but nobody should be criticizing hayesk right now.

thank you hayesk for talking some sense.
     
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Nov 15, 2013, 12:04 PM
 
"Cannacord's report does not take into account the device sales of companies like Huawei, Lenovo, and ZTE. "

If the data doesn't support being precise, then giving that precise of a number is a meaningless lie.

It's meaningless on many levels - folks. Lets make a simple example. X widget has a market of $1,000 dollars. Company 1, captures 100% marketshare, and grosses $1,000.

Company 2, trying to enter the market, but misses its product introduction deadline - does 1 trillion in R&D - and doesn't make a single dime.

Add the 1 trillion to the numbers for some negative profits? NOOOOO. DON'T.
     
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Nov 16, 2013, 10:50 AM
 
Have to come down on hayesk's side here: a loss is not a negative profit, it is a loss.

Profits start at $1 and go up from there. Losses start at -$1 and go down from there (or up if you prefer to use financial terminology). You don't say "Our company made a profit of -$1,000,000." The 109% of profits is not only confusing, it's also impossible.
     
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Nov 16, 2013, 02:06 PM
 
Guys, it's just a different way of framing the numbers.

Momentarily confusing until you get that this is all positive income, and just adds up to 109% of total profits made in the market segment.

Understand, shrug it off, and move on.
     
   
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