Apple Is The Biggest Winner Of Galaxy Note 7 Fiasco

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The Galaxy Note 7 has been the talk of the town for a few months now for all the wrong reasons. What many touted as potentially the best Android flagship of the year turned out to be a portable fire hazard and Samsung still isn't sure what went wrong with its latest flagship. Whereas the South Korean tech giant is still in damage control mode, the rest of the industry is moving on and profiting on the back of the Galaxy Note 7 fiasco. Many potential Galaxy Note 7 buyers are now turning to other phones, and while a recent survey conducted by ReportLinker suggests that the brand damage Samsung suffered due to this entire ordeal isn't too horrible, it also points out that the biggest winner here is – Apple.

An industry report published by Tim Long, a market analyst at BMO Capital Markets seemingly corroborates that claim. In his elaborate opinion published yesterday, Long concluded that Apple can thank Samsung for its incredible Q3 2016 profits. The Cupertino-based tech giant is now allegedly the only phone maker in the world that's actually earning money from its smartphone manufacturing business. To be more specific, Long's calculations suggest that Apple's earnings account for over 103% of all operating profits in the industry. Yes, you've read that correctly. Apple's profit share is over 100% because a significant amount of original equipment manufacturers (OEMs) like HTC are operating at a loss.

On the other hand, Samsung managed to net a minuscule 0.9% of industry's netted overall in the third quarter of the year despite holding 21.7% of global smartphone shipments, significantly more than Apple (13.2%) and more than twice as much as Huawei (9.7%). In total, Long estimates that the industry shipped 346 million smartphones during Q3. Apple's share of smartphone market profits rose by 14% in comparison to the same period in 2015. Long believes that this rapid increase can mostly be attributed to Samsung who dropped the ball with the Galaxy Note 7 which went through two global recalls before it was permanently discontinued in October. Samsung is currently in the process of ramping up production of the Galaxy S7 and the Galaxy S7 Edge in hopes that it can compensate for the premature cancellation of its latest flagship, but it seems that the damage has already been done.

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