Apple and Samsung Account for 100% of Mobile Profits in Q1

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Apple and Samsung Earn 100 percent ProfitsApple and Samsung have long been held as giants of the smartphone industry, casting a shadow over smaller manufacturers with growing profits and market share. However, the two companies have truly become the rulers of the handset industry, reportedly accounting for 100 percent of mobile profits in the first quarter of 2013.

According to recent data from broker house Canaccord Genuity, Apple and Samsung combined managed to capture 100 percent of the mobile industry’s profits last quarter. Apple was out in front reporting 57 percent of the global smartphone industry’s profits, meaning Samsung trailed with almost 43 percent.

While these profits are certainly impressive, the dark reality is that with Apple and Samsung soaking up all of the profits, the rest of the industry finds itself floundering. In fact, the only other mobile manufacturer that managed a mobile profit share above 0 percent was LG with its 1 percent share.

Perhaps even more astounding than the recent display of dominance by Apple and Samsung, is the fact that this quarter actually marks a decline from last year. According to the research firm, the two companies combined to capture a 103 percent of the handset industry profits back in 2012.

Exceeding 100 percent profits seems to defy logic, but it actually makes sense given the costs incurred by smaller manufacturers. “Due to operating losses from smaller scale competitors trying to compete, Apple and Samsung’s combined share of industry profits have exceeded 100 percent in previous quarters,” Canaccord Genuity’s T. Michael Walkley told AllThingsD.

With Samsung and Apple so far out in front of the rest of the competition, the two giants have begun to battle among themselves. Samsung has been able to slowly eat away at Apple’s profits over the last few quarters. Canaccord Genuity noted that Samsung is currently on track to surpass Apple for the largest smartphone industry profits sometime within the next few months.

While Samsung is making a steady climb, Apple shouldn’t be disregarded. Although the company is currently seeing sales for the iPhone 5 slow down, the launch of the iPhone 5S will likely inject new life into the hardware manufacturer. 

Source: AllThingsD, BGR

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