Samsung overtakes Apple in phone profits but others grow sales even more

Galaxy S 4 S-View cover

Samsung topped Apple last quarter in terms of smartphone profits, but both companies didn’t see sales growth realized by most other handset makers: LG, Lenovo, ZTE and others picked up more market share around the world over the past year.

The operating profit figures come from estimates at Strategy Analytics. On Friday, the research company shared its data for the second quarter of 2013:

“We estimate Samsung’s operating profit for its handset division stood at US$5.2 billion in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion. With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry’s largest and most profitable vendor.”

It is a win of sorts for Samsung, although it could be short-lived. The company introduced its Galaxy S 4 during this quarter, while Apple had no new phone of its own.

Galaxy S 4 featured

And Apple is still selling many older iPhones, such as the 4 and 4S models, which actually brings down the average selling price of Apple’s handsets. When the next iPhone model arrives, it’s likely that Apple retakes the profit crown.

While these two industry Goliaths are doing battle for smartphone profit supremacy, however, there’s a host of Davids waiting in the wings tackling  smartphone market share. Annual data from IDC shows that other handset makers are growing sales faster as Samsung and Apple have actually lost market share over the last 12 months:

IDC smartphones 2Q2013

I suspect these saw larger growth because in some sense, they’ve “caught up” to Samsung with regards to hardware build, design and features that most people want in a smartphone. And they all have one thing in common when it comes to software: All of these companies offer Android phones that are lightly skinned, offering a desirable alternative to Samsung’s “in your face” TouchWiz user interface.

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