Apple Takes 104% of All Smartphone Profits Following Galaxy Note 7 Recall

Apple accounted for over 100 percent of smartphone industry profits in the third quarter of this year, according to estimates published by BMO Capital Markets on Thursday.

Analyst Tim Long, quoted in the Investor's Business Daily, said Apple's staggering 103.6 percent profit share in Q3 2016 came largely as a result of significant losses posted by rival vendors including LG and HTC, and despite Apple continuing to shift fewer handsets year on year.

galaxy-s7-edge-iphone-7-plus
Based on units alone, Samsung accounted for 21.7 percent of all smartphones sold, with Apple coming in second with a 13.2 percent share. In terms of profits however, Samsung came a distant second to Apple, capturing only a 0.9 percent share.

Samsung ceded market share in smartphone shipments to Apple and Chinese vendors in the third quarter because of its Galaxy Note 7 troubles, Long said. He expects further share loss by Samsung in the current quarter. Apple captured over 100% of smartphone industry profits for the first time, thanks in part to Samsung's weaker results, Long said.

If accurate, the estimates represent the first time Apple has achieved smartphone industry profits of over 100 percent - an impressive number for a company owning only around 12 percent of the market.

According to the same report, Apple managed 90 percent profit share in the same quarter a year ago. However, this year Apple's iPhone 7 numbers were undoubtedly helped by Samsung's hugely damaging Galaxy Note 7 recall and discontinuation, which effectively took the South Korean company out of this year's flagship smartphone race, indicating Apple's profit share is unlikely to be sustained in the long term.

Despite the impressive numbers, Apple's recent third quarter financial results reported its first full-year revenue decline for Apple since 2001, although Apple expects to return to revenue growth in the holiday season on the back of sales of the iPhone 7 and iPhone 7 Plus.

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Top Rated Comments

needfx Avatar
101 months ago
when math barely makes sense
Score: 113 Votes (Like | Disagree)
zhang96 Avatar
101 months ago
And 1000% of adapter profit.
Score: 84 Votes (Like | Disagree)
Thunderhawks Avatar
101 months ago
when math barely makes sense
Word hasn't gotten around that 100% is where it ends.
Score: 73 Votes (Like | Disagree)
AJ5790 Avatar
101 months ago
Maths was never my strong point.

Could somebody explain this in simple terms? How it's calculated?
If we are in the same industry and I make $100 but you lose $50 (or make a -$50 profit), the total profit across the entire industry (your "profit", and my profit) is $50, because your loss pulls the total profit for the industry backwards. So my percentage of the industry's profit is the profit I made divided by the industry profit times 100 (to convert from decimal to percent) or ($100/$50)*100=200%. Therefore I made 200% of the industry profit. In this case the iPhone is almost the ONLY phone that actually makes money. Samsungs profit share was 0.9% and HTC and LG lost money. That's what happens when you sell millions of devices at a loss.
Score: 71 Votes (Like | Disagree)
Json81 Avatar
101 months ago
Maths was never my strong point.

Could somebody explain this in simple terms? How it's calculated?
Apple makes 10 dollars.
Samsung looses 2 dollars

Total profit is now 8 dollars.

Apples share of total profit is now 10/8 = 125%.
Score: 53 Votes (Like | Disagree)
needfx Avatar
101 months ago
Word hasn't gotten around that 100% is where it ends.
I am pretty sure this is how it was calculated

10^1.373=23.605
√ 23.605=4.858
4.858€ = 4.858$
sin(4.858) = -0.989
lg function Error() { [native code] } = NaN
acos(NaN) = NaN
104%

edit: @keysofanxiety
Score: 47 Votes (Like | Disagree)