Samsung Handsets Surpass iPhones in Profitability, Report Says

Samsung Handsets Surpass iPhones in Profitability, Report SaysThe Apple vs. Samsung competition just took a new twist with a report that puts the South Korean electronics giant ahead of Apple in handset profitability.
This means that Samsung’s smartphones and feature phones, led by the Galaxy series, are more profitable than the iPhone series.
According to the latest research from Strategy Analytics, Samsung became the world’s most profitable handset vendor in the second quarter of 2013.
Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.
Samsung’s operating profit for its handset division stood at $5.2 billion in the second quarter of 2013, the research found. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of $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,” said Strategy Analytics.
Apple’s reign as the world’s most profitable handset vendor lasted almost four years, from the third quarter of 2009 to first quarter of 2013.
For consumers loyal to Apple’s iPhone, none of this probably means much of anything.
But for Apple, it’s another reminder of the urgency to put out a lower cost iPhone to speed up global growth and break into prepaid markets.
Apple reported strong fiscal third-quarter earnings and revenue that beat Wall Street forecasts. But, Apple’s weakness is shrinking margins and struggling China sales.
Apple’s revenues in China, Hong Kong and Taiwan fell 47 percent over the previous quarter and were down 14 percent year-on-year.

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