back to article Samsung overtakes Apple as most profitable global handset maker

Samsung has overtaken Apple in worldwide handset-sales profits, banking $5.2bn versus Cupertino's $4.6bn in the second quarter of 2013, according to the latest data from Strategy Analytics. "With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's …

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Go

I predict

a string of ACs shills reporting that their choice of Apple/Samsung/WinPhones are better than whatever the previous AC said was good.

Ready.. set... go...

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FAIL

Re: I predict

13% of the market is still, err, respectable, if you don't mind thinking differently.

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Anonymous Coward

Re: I predict

Well, it's inevitable that WinPhone will overtake Apple at some point. It's a more powerful / secure OS, and Nokia simply make better phones. Apple have nothing to touch the cameras in the 920, 9255, 1020, etc....And they have better screens, touch panels, microphones, nav, maps, etc. etc....

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rvt

Re: I predict

But iOS has applications, it will take long while if any before windows will take over the mobile phone market. History showd they where never very good in the mobile sphere..

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Memories of Eaton's...

I am reminded of a company that is now gone called Eaton's. They focused so much on selling only "premium priced" gear that they alienated their clientele and eventually folded. Not to say that Apple is going to fold....but it is interesting to note that the cheaper 3 inch models and the larger 5 inch models have them somewhat on the ropes as it were. Samsung and others listened to their clients asking for more variety. They gave it. Meanwhile Apple insisted that their one size fits all was bang on. Now..just like Microsoft they have their tails between their legs and are "exploring" other screen sizes.

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IT Angle

Re: Memories of Eaton's...

Agreed that pricing is a big problem for Apple.

The main thing for me is how incredibly limited the interface is. After spending the past year and a half on Android, I had to set up an iPhone 4s for someone in the office recently. The sheer number of settings you CAN'T change and number of things you absolutely CAN'T do on the iPhone is overwhelming and highly annoying. Especially when you get used to having tremendous flexibility with the Android.

In fact, I really can't consider an iPhone a "Smartphone" from my perspective any longer - not compared to a modern Android phone. It's really not a computing device at all - just a glorified iPod with a cell phone chip.

I would say that the iPhone achieved the status of being one step above a feature phone - and then stayed that way.

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Re: Memories of Eaton's...

Apple have always been like that. They come up with a new thing, saying 'Hey, look what this can do!'. They aren't bad at making it dead simple for almost anybody to buy and use the thing straight out if the box, no need to plough through a million settings first, etc etc. They are also quite good at then keeping the pattern the same for future incarnations of the thing so as to retain their customer base, encourage upgrades, etc.

That's their model, and it works quite well for them. They don't need to offer an 'expert-do-what-you-want mode' to attract more market share. Anyway there's not really that many experts out there to be worthwhile chasing. They've also learnt that failing to innovate will kill them, as it almost did in the 1990's.

To me Android (from a purely commercial point of view) is totally weird. Google do all the work, Samsung make all the money. That's just nuts. In fact the amount of money Google isn't making from Android is crazy, especially when you look at all the de-Googlised versions that have flooded the biggest market in the world (China). The return on Google's investment is mostly going into other people's pockets.

And then the fragmentation of the Android world is an appalling mess. Ok, so as a consumer you can avoid it by buying a Samsung or a Nexus, but for applications developers it's a disappointment. Fortunately Samsung and Nexus adds up to a big enough market for applications developers to bother with, but they're not making as much as they might have. Another down side is that Google didn't make it hard to pirate software, so the developers get mightily ripped off. The pirates are even making money by selling ripped off APKs on the BlackBerry app store. Nor did Google come up with a way for bug fixes to make their way onto deployed handsets in an efficient manner.

So given all that, I have to humbly disagree with you on iPhone not being a smart phone. To anyone who cares about these wider issues (and security too) 'Smart' means much more than some cool technology (which Android is admittedly very good at), and they buy BlackBerries, WinPhones and iPhones depending on their requirements.

However, most people don't care about these things at all, which is why Android sells so well. And Google make just enough money to pull the wool over their shareholders' eyes, but really their poor strategy means they're missing out on a far larger fortune.

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FAIL

Re: Memories of Eaton's...

Hardly a valid comparison.

Apple doesn't have executives who are pot heads, or race car drivers, or wanna be politicians.

Eaton's, a family owned, Canada-wide, department store was founded by a hard working immigrant Scotsman using very tight vertical integration and then neglected by the third generation who were little better than wealthy playboys.

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Re: Memories of Eaton's...

There's been a license check API since Android 1.6, but apparently not many devs used it.

Google makes money from the Play Store, which grew 150% in the last year (in app revenue) and from mobile search. Probably more important than the money the do make is that if they didn't have Android they would have less influence on what people do with their mobile devices, and their mobile revenues may have suffered because of that.

And they charge to have the Gmail, Play Store etc apps installed.

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Re: Memories of Eaton's... @Andy Prough

"It's really not a computing device at all"

Maybe that's why it's called "iPhone", and not "iComputer".

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Anonymous Coward

Re: Memories of Eaton's...

Number of things you can't do - really - perhaps you have some example that 99.9% of people would never use. Most Android users I have seen do not use the 'smart' features or ability to configure it so highly - partly as most do not need or know how to root their devices or just don't need to. The reality is most use their Androids for phone calls and text messages - very little else - some do not even have data enabled contracts.

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Re: Memories of Eaton's...

Indeed, Apple is now run by a limp wrist who wears Steve Jobs' turtleneck but can't fill his shoes.

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rvt

Re: Memories of Eaton's...

Strange, and yet a iphone does everything i want it to do, i takes pictures, i can call with it, browse some internet site, and check my mail.

You got to remember that this is about the usecase of a mobile phone device.

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Re: Memories of Eaton's...

I think you have a point. On the flip side, I found android to be confusing to use all regular users. There are so many setting to change. Sometimes people just want simple steps. Too many settings can turn off what you call smartness. If it was so smart, why do I need to change so much for one simple request.

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Holmes

Re: Memories of Eaton's...

@rvt - "Strange, and yet a iphone does everything i want it to do, i takes pictures, i can call with it, browse some internet site, and check my mail. You got to remember that this is about the usecase of a mobile phone device."

My point exactly - its a glorified feature phone.

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margins

Apple probably make more profit per handset, especially when you consider that peripherals are charged at a hefty premium. Samsung however seems to take more chances as mentioned above, not dictating but listening. Apple do make perfectly good mid market devices which it sells for premium prices, and some fapples will always buy regardless.

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Re: margins

"Apple probably make more profit per handset"

That's an interesting trend.

First it was: Apple has the biggest smartphone market share.

A year or two later: well, it doesn't have the biggest market share, but it's easily the most profitable.

Now it's: not the most profitable, but probably makes more profit per handset.

Anyone see where this seems to be heading?

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Re: margins

You gotta feel sorry for the Believers. every couple of months they have to find a new (pi$$ing contest) metric.

How long until they point out that Apple must be better because their chief messiah in charge of design has fewer letters in his surname than his counter part at Samsung?

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Re: margins

Wow, where do you two get that I'm desperately trying to big up Apple, did you even read my post before deciding to get your handbags out?

Apple almost certainly do make more cash per handset, divide the profit by the market share and it's somewhat likely. Then they charge massively for peripherals because they have tapped a niche who encourage them thanks to fancy advertising. I don't care that they do, I'll bet Vertu beat then hands down on this front for instance, just pointing out that they're hardly fucked, and some fapples will buy anything with their brand not through technical evaluation but because the adverts told them to.

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Anonymous Coward

Re: margins

"Apple almost certainly do make more cash per handset"

I take it you've considered development costs of the OS and their own app suit (maps etc.) into account? Because Apple develop all this in house, Google develops it for Samsung and they just adapt it with TouchWiz - and because of the way Android works*, that cost is likely shared between all Samsung Android devices dramatically reducing the per-device cost of development.

There are plenty of other areas to consider, i.e. running the App Store vs using Google Play and so on. All of this would need to be factored in before you can determine that Apple makes more cash per handset.

Without any hard evidence, you're making wild assumptions.

* Assuming Samsung are utilising Android's layout system, once built a single version of TouchWiz can cater to all devices, tablets and phones of any screen size alike.

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Re: margins

Development costs amortised across 27M units in the last year alone, where most of the changes are incremental? The apple App Store as a cost, not a massive cash cow revenue stream? Getting uppity about fact checking seems a little redundant tbh.

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Re: margins

The next fanboy get-out was there in the article:

"The term 'handset' includes all smartphones and feature phones combined."

So Apple might still make the most from Smartphones.

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Re: margins

"Apple almost certainly do make more cash per handset"

Probably even more true of the older handsets. The iphone 4 is now probably more profitable than the 5. Just as well, at least it might help to subsidise the poor iphone 5 sales...

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Facepalm

Re: margins

"Apple probably make more profit per handset"

Never forget the desperate, rapidly collapsing evil empire makes its only contribution to the mobile industry by extorting Android manufacturers. Without their wonderful assistance, who knows what the profit and loss sheet would look like?

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Anonymous Coward

Re: margins

"poor iphone 5 sales..."

I don't think anyone seriously thinks iPhone sales are "poor"

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Meh

Re: margins

Don't think you were trying to "big up" Apple at all.

But aren't others allowed to agree with you and add further angles?

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Re: margins

Ah, 'twas the -2 with 2 responses that made me get the wooing end of the stick, apologies.

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FAIL

Re: margins

"The iPhone 5, which is almost a year old, was the most popular iPhone sold in Apple's quarter ending June 30..." - Dan Farber @ CNet.

That would seem to indicate "poor" is the wrong adjective.

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Anonymous Coward

Re: margins

Well Google did copy Microsoft patented tech. Android companies also have to make similar arrangements with Apple and Nokia.....

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Re: margins

"Well Google did copy Microsoft patented tech"

That's probably the reason why Microsoft haven't sued Google.

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Apple still make a bucketload of cash, Samsung also make a bucketload of cash.

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Anonymous Coward

hmmm buckets

seems to me there's a gap in the market here, I need to be selling buckets to Apple and Samsung to carry all that cash! Kerching!

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Anonymous Coward

Re: hmmm buckets

Apple won't be needing them for a while... all their profit is safely locked away off-shore, where the taxman (and shareholders) can't touch it.

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Anonymous Coward

Re: You're losing it wrong

the fact that Apple are now happily ripping off other people (well they've always done it), should, if any form of LOGIC is applied mean that their law suits should be thrown out for rank hypocrisy. I've made that law up haven't I?

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Anonymous Coward

Re: You're losing it wrong

" innovating rather than litigating"

False dichotomy

Amazing how many morons resort to this. About as intelligent as a barge pole.

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Re: You're losing it wrong

"Sad but predictable"

Much like many of your posts and the ago-old "holding it wrong" joke.

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Anonymous Coward

Re: You're losing it wrong

" Copying Androids UI in iOS7 must be plan B" - it must be seeing as they seem to have copied the somewhat better Windows Phone UI....

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Everything slows.

I read don't read the article as Samsung has overtaken Apple, I read it as smartphone sales are shrinking and the winner is becoming the second place loser (if that makes sense?).

As far as Apple taking a page from Google, well that does seem possible being they have apparently taken a page from Microsoft and stopped creating anything new at all. There is only so many times you can sell ice to an Eskimo.

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Anonymous Coward

saturation = stagnation

When you first innovate - people go "wow!"

when you do the same thing over and over again, they go "YAWN!"

Oh wow, it's a phone? Oh that's new, never seen one of THOSE before.

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Re: saturation = stagnation

"When you first innovate - people go "wow!""

or should that be

"When you first tell your legions of fans in the press that you have innovated..."?

Just out of interest, how often was the word innovate used before Apple started to tell us how innovative they are?

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3 inch= 'low end'

Amazing if you think about it, when those Nokia(s) I owned back in the late 90's had maybe a 1" screen? With 4 lines of text.... 3" low end. lol

I'm not *that* old but I feel like it sometimes.

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Re: 3 inch= 'low end'

My first touchscreen phone had a 3.5" screen back in 2004. When Apple invented the wheel/phone/whatever in 2007 I had a 5" touchscreen phone (which also had all of those things that apple decided phones don't need like GPS and 3G, 3rd party apps etc). Mind you, given the cost of my phone, the iPhone would have been a lower budget phone (comparatively).

Personally... I was born old.

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Anonymous Coward

Re: 3 inch= 'low end'

I bet you were using a silly piece of plastic to touch the screen though.

I had a few phones with a stylus, I even sold one of them to a friend who promptly gave it me back and told me to sell it on ebay for him as he couldn't walk and text with a stupid stylus.

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Re: 3 inch= 'low end'

Each of the Windows Mobile phones t hat I had was supplied with a stylus but with the larger screened units I had no need for it. In 2007 HTC developed touchFlo which helped to make the stylus redundant for many tasks.

On the smaller screens the stylus approach had the advantage of allowing more icons/tapable areas than the capacitive finger model. Rather than using a stylus I )like many others) used my finger nail rather than a stylus.

Not sure I understand why your friend could not hold a phone with one hand, use it with the other and walk at the same time.

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Anonymous Coward

The reason? it's simple, they produce really cheap, plasticy phones which people buy because of the hype.

In contrast to Apple who produce more premium devices in terms of materials.

The HTC One has twice the capacity and a much more premium and solid construction.

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"The HTC One has twice the capacity "

Not without an SD slot it doesn't.

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Anonymous Coward

'more premium devices'

I would like to find the marketing executive who thought up the misuse of 'premium', and hang him (it's a him, sho'nuff) by his black turtleneck. It's as bad as 'retina' display.

If you mean better, stronger or prettier materials, say so. But that tends to invite questions like 'why is aluminium better than polycarbonate when it dents and corrodes so easily?'.

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Re: 'more premium devices'

Agreed, I don't understand why we are constantly told that aluminium is more of a premium product than carbon fibre. Carbon fibre is more expensive to machine, stronger, more durable and lighter than aluminium.

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