When you say Android, most people think Samsung. This shouldn’t come as a surprise as Samsung is not only the biggest Android device manufacturer, but also the biggest smartphone manufacturer in the world with their successful Galaxy series, and the Galaxy S4 looks set to continue this trend with 10 million devices forecast to be sold by the end of May, surpassing even Apple’s iPhone in opening sales figures. Because this is the one of many products that Samsung produce, it shouldn’t come as a surprise that 30% of the entire smartphone market is attributed to Samsung and with Android making up 75% of the smartphone market it does raise the question; how much profit does Samsung make?
Strategy Analytics, one of the leading industry analyst firms took a stab at the question and their answer is quite shocking. According to their analysis, $5.1 billion of Samsung’s total $7.9 billion operating profit last quarter came from Android devices. Strategy Analytics also estimated that the total profits between all the Android device makers was $5.3 billion; that means 94.7% of the total profits from the sale of Android devices belong to Samsung. The only company that even comes close to this figure is LG with their estimated $119 million in profit, no doubt helped by their recent form with the LG Optimus G and the Nexus 4. Their profit however is still nothing more than a drop in the ocean compared to Samsung’s $5.1 billion.
The remaining $100 million is therefore split among the other brands such as ZTE, Huawei, HTC, Sony and Motorola. While the relatively low profits of other firms is a worry, it doesn’t necessarily mean that they are struggling, but it does mean Samsung is without a doubt the ‘King of Android’ and with the profits and resources they have obtained over recent years gives them a large buffer to shield them from a rainy day as well as provide the money to innovate even further. This also shows that despite all the hate directed towards Samsung and their plastic devices, it appears as though their business model of an efficient supply chain, a multitude of well designed devices and marketing is the key to success.
What do you think about Samsung’s dominance? Should Google be worried that their baby is basically Samsung’s?
Source: Strategy Analytics