Consumer Electronics
Samsung Ahead of Apple in Smartphones, but at What Cost?
Published:
Last Updated:
Samsung boasted that it sold more smartphones than Apple (NASDAQ: AAPL) in the third quarter, but it may not have made much money in the process. Volume is nearly useless without margins.
Samsung shipped 27.8 million smartphones in Q3, taking 23.8% of the market, Milton Keynes of UK-based Strategy Analytics said. That is confirmed by his research, according to Bloomberg. Apple sold 17.1 million iPhones in the same period.
The iPhone is sold to most carriers for $200 a unit more than any competing smartphones, if figures from Sprint-Nextel (NYSE: S) are correct. Samsung’s smartphone division said its operating margins were only 16.9%. Apple figures indicate iPhone margins are well over 50%, depending on how marketing costs are counted.
The smartphone market share race has gotten more intense by the quarter. Leaders that once included Research In Motion (NASDAQ: RIMM) and Nokia (NYSE: NOK) have lost all momentum. Nokia hopes to regain part of its lost market through its partnership with Microsoft (NASDAQ: MSFT), but the Windows mobile OS has only a fraction of the global smartphone business. It is clear that the two partners will need to spend billions of dollars to do well — if they can do well at all. Nokia may not make money in the smartphone business for years. RIM’s BlackBerry sales are so poor, it probably will never rebound.
Apple continues to have the advantage of nearly unsatiated demand for the iPhone, which grows with the introduction of each new version of the product. Analysts point out that iPhone sales have barely begun in the world’s largest handset market — China. Samsung’s lead may not last for long.
Samsung, and all of Apple’s other competitors, have to counter one concern about their smartphone businesses. How much will they have to spend to catch or stay ahead of iPhone sales?
Douglas A. McIntyre
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
