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Apple and Samsung stole all Q1 mobile phone profits

Apple and Samsung each reported record first-quarter results last week and according to research conducted by one analyst, the companies combined to account for all mobile industry profits last quarter. Apple last week reported $11.6 billion in profit on $39.2 billion in sales, both second fiscal quarter records for Apple, and Samsung managed a best-ever profit of $4.5 billion in the same quarter, $3.9 billion of which came from its IT & Mobile Communications business. Read on for more.

According to Raymond James analyst Tavis McCourt, Apple accounted for a staggering 80% of all mobile industry profits last quarter and Samsung was responsible for the remaining 20%. The two companies also combined to take in about 74% of the handset industry’s revenue, McCourt said.

“It is getting increasingly hard to understand where the rest of the device vendors will get the capital to fund necessary R&D and sales and marketing investments to continue to compete with Apple and Samsung,” the analyst wrote in a recent note to investors.

“With essentially all of the other hardware vendors besides Apple and Samsung struggling to find profits to reinvest into R&D, Microsoft and Google have to be wondering who their hardware partners will ultimately be,” McCourt continued. “Neither wants to be in a position where they have to take on more of the R&D burden, and neither want to have to initiate bidding wars to give Samsung an incentive to focus on its platform. Our assumption is that both Huaweii and ZTE will be courted heavily over the next few quarters by both Microsoft and Google as they look to strengthen their stable of sustainable hardware partners.”

UBS analyst Maynard Um previously estimated that Samsung and Apple would combine to account of 90% of all smartphone profits in 2012.

Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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