Apple and Samsung have inhabited much of the smartphone profit for a while now, but it’s alarming to see who has been displaced in order for them to reach the 99 percentile.
According to calculations done by Horace Dediu of Asymco, Apple and Samsung are earning 99% of the profit in the smartphone market. This comes at a time when overall profits have tripled in four years, so he concludes that it’s not so much the two companies are “stealing” profits away from their competitors, but that they are creating brand new profits from nothing.
The market in 2010 was dominated by Apple, Samsung, Nokia, RIM and HTC. Today, the last three companies are either losing money, or in the case of HTC, have managed to lose a fair amount of market advantage. While HTC earns the remaining 1% of the profits, Nokia and RIM are losing money at an advanced rate.
Three-quarters of the profit is made by Apple, who have entered into agreements with 250 carriers worldwide, charging high amounts to the carriers who hope to recuperate their initial losses with long-term contracts. A number of customers are expressing disappointment with Nokia’s move to Windows Phone, while RIM’s shares have hit eight-year lows on the announcement of BlackBerry 10.
The above chart will likely rearrange itself again next year, but it’s unlikely that either Apple’s or Samsung’s share will dissolve in any appreciable way. We hope that all the other companies get back on their feet, but the results prove how difficult it is to make money in this fast-changing industry, and how quickly that change can happen.
Source: Asymco
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