Samsung swipes 95% of total industry profits earned from Android phones

May 21, 2013 Leave a comment

HOW MUCH? SAMSUNG SWIPES 95 PERCENT OF TOTAL INDUSTRY PROFITS EARNED FROM ANDROID PHONES

By Andy Boxall — May 16, 2013

Google revealed its own fair share of big numbers associated with Android during its Google I/O keynote presentation, saying as of 2013, there have been 900 million activations of the mobile OS, making it the world’s most popular operating system. That must mean there are a lot of companies out there getting rich and fat from selling Android hardware, right?

Well, yes, but if the latest research from Strategy Analytics is accurate, it’s only one company doing so, despite Android being licensed by dozens of firms. As you have probably guessed, the one making the most profit from Android is market leader Samsung, but the actual figure may come as a surprise, as it’s said to have taken almost 95 percent of the global profits earned from the mobile OS during the first quarter of 2013.Analysts broke it down like this: Globally, it’s estimated the Android industry made $5.3 billion profit in the first quarter of this year, while the profit estimates for Android phones shipped by Samsung comes in at $5.1 billion for the same period. The exact figure quoted is 94.7 percent profit share, and that’s not including tablets either.

According to Strategy Analytics’ chart, in a (very) distant second place is LG, with 2.5 percent profit share, while all the other Android phone manufacturers – think about it, that’s everyone from Sony and HTC to Huawei, Acer and ZTE – are lumped into an Others category, which totals 2.7 percent.

While we may mock Samsung’s obsession with producing an Android device using every possible screen size, and question hardware using the Galaxy S3 or Galaxy S4’s name to make it more appealing, it’s these phones and Samsung’s massive international distribution network which has yielded this astonishing level of control. Still to this day people think Nokia should adopt Android, but when you see how little established players such as Sony and HTC are making from their own, high quality phones, Windows Phone suddenly looks a lot more attractive.

Finally, and perhaps even more surprising, is Strategy Analytics’ Director Neil Mawston believes Samsung now makes more money from Android than Google.

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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