Cupertino & Samsung garner 90% of smartphone market profitsPublish date: 18 June 2012 by Hanleigh Daniels
When it comes to the smartphone market, Android-running mobile devices led by Samsung, and Apple’s iPhone are dominating the mobile market. Market research firm ABI Research has now quantified these two companies’ dominance in the smartphone sector in terms of their share of the profit and stake in the market.
According to the analytics firm, smartphone shipments increased by 41% year-on-year to 144.6 million as of the quarter ending March 2012. The company stated that despite this growth, many smartphone OEMs (original equipment manufacturers) aren’t reaping the fruits of this rapidly expanding market.
This is due to Samsung and Apple capturing 55% of global smartphone shipments in Q1 2012 and over 90% of the market’s profits. The dominance of these two players in the smartphone segment of the mobile market is severely affecting competitors such as Nokia and BlackBerry maker RIM (Research In Motion).
The amount of smartphone vendor shipments during Q1 2012 according to ABI Research further explains the problem, showing clearly how Samsung and Apple are dominating the market:
Samsung - 43 million
Apple - 35 million
Nokia - 11.9 million
RIM - 11.1 million
Sony - 7 million
Huawei - 6.8 million
ZTE - 4.9 million
Michael Morgan, ABI Research senior analyst for devices, applications and content stated that Nokia will have to grow its Windows Phone OS business by a whopping 5000% during the rest of 2012, just to offset its declines in Symbian shipments.
Morgan added that, of the top ten smartphone OEMs, only Samsung and Sony experienced sequential growth in shipments during Q4 2011. Espoo experienced a 40% sequential decline in shipments and may soon be passed by RIM in terms of smartphone shipments. This, despite the fact that things are also not rosy for the Canadian smartphone and tablet maker, as it suffered a 20% sequential decline in smartphone shipments.
Key markets crucial for future growth
ABI Research said that as the smartphone markets of the US and Western Europe pass 50% penetration, smartphone OEMs should seek growth in key markets, the likes of China, which continues to show strong shipment growth of more than 80%.
Despite the shipment growth opportunities that China offers, smartphone OEMs will have to contend with local players such as ZTE and Huawei, whose cost structures are tailored towards delivering smartphones and content ecosystems at the lower price points needed to drive growth across that country.
“As Nokia’s market share in China plummets, the competition to fill this power vacuum has the potential to make or break smartphone OEMs currently struggling with profitability and differentiation,” added Jeff Orr, ABI Research practice director for devices, applications & content.
In related news, market research company IDC recently stated that it expected Android smartphone shipments to peak within 2012 as mobile shipments slow, and Windows Phone OS to take second place on the smartphone OS podium by 2016.