Samsung Electronics has managed to corner 12.9% of the global smartphone operating profits in the first quarter of 2017, according to a report from analytics firm Strategy Analytics. This reported profit share makes Samsung the second-most profitable smartphone manufacturer behind the Cupertino-based Apple Inc and the most profitable Android smartphone manufacturer. While Samsung retained its profit share ranking this quarter, the company's operating profit is actually lower compared to the same period last year. Samsung Electronics reported $1.57 billion of operating profit in the first quarter of the year 2017, which is 21.9 percent lower compared to the first quarter of the year 2016.
The decrease in the operating profit of Samsung Electronics is blamed on the lack of a flagship offering in the first quarter of the year 2017. With the massive losses resulting from the recall of the Samsung Galaxy Note 7, Samsung relied on its older flagships, the Samsung Galaxy S7 and the Samsung Galaxy S7 Edge, and on its mid-range devices to deliver the much-needed sales over the said period. Analysts expect that the sales, and possibly the operating profit, of Samsung Electronics in the second quarter of 2017 may be bolstered by the launch of the manufacturer's newest flagships, the Samsung Galaxy S8 and the Samsung Galaxy S8 Plus.
The overall picture for smartphone manufacturers is unfortunately not very encouraging. According to Strategy Analytics, Samsung and Apple cornered more than 96 percent of total smartphone manufacturer operating profits in the first quarter, leaving a measly four percent for the remaining 300 manufacturers. Therefore, it is not surprising that only ten manufacturers actually profit from their smartphone businesses. The operating losses incurred by a substantial portion of Android smartphone manufacturers is even more disturbing given that the almost all of the smartphone manufacturers do not need to spend a huge sum of money to maintain the software of its devices, given that Google gives its Android operating system to device manufacturers for free. A high-profile example of an Android smartphone manufacturer losing a substantial amount of money is HTC, which lost around $100 million in the fourth quarter of the year 2016 with no reversal of the trend in sight. While not as highlighted as HTC's story, this is certainly the case for the vast majority of Android smartphone manufacturers around the globe.