Apple generated $8.5 billion of the worldwide smartphone market's profits this quarter
Apple has always been the most profitable smartphone maker since it first started selling iPhone way back in 2007. During third quarter of 2016, Apple made 91 percent of the total smartphone profits – a new record for the Cupertino company.
Apple generated $8.5 billion of the worldwide smartphone market's profits this quarter. According to research firm Strategy Analytics, the worldwide smartphone market's operating profit came in at $9.4 billion this quarter. China's Huawei was the second most profitable brand with 2.4 percent share in the operating profit. Vivo and Oppo were the two other companies to manage profits this quarter.
Neil Mawston, Executive Director at Strategy Analytics, added, "We estimate Huawei generated $0.2 billion of smartphone operating profit worldwide in Q3 2016. Huawei captured 2 percent share of all smartphone profits, taking second spot overall, and becoming the world’s most profitable Android vendor for the first time ever. An efficient supply chain, sleek products and effective marketing have been among the main drivers of Huawei’s robust profitability. Vivo and OPPO followed in third and fourth place and each took 2 percent global profit share. Vivo and OPPO delivered relatively healthy profitability due to disciplined pricing and soaring shipments across Asia.”
Apple's record profits came partly due to the successful launch of its iPhone 7 in September. However, the iPhone 7 was available only for a few weeks in this quarter, which also means Apple's record profits could have included strong sales of iPhone 6s and iPhone SE.
Apple's profits got bolstered after Samsung failed to deliver a stellar product with its Galaxy Note7. After Galaxy Note7 started burning and the company issued a worldwide recall, iPhone 7 became the obvious option for Note7 buyers. Samsung didn't even make it to Strategy Analytics' list of top smartphone makers generating profit. In the previous quarter, Apple and Samsung were the leading smartphone makers in terms of profits.
"Three of the world’s top four most profitable smartphone vendors are currently Chinese. Huawei, Vivo and OPPO have not only improved their smartphone product lineups this year, they have also enhanced their operational abilities and kept a tight lid on expanding distribution costs," added Linda Sui, Director at Strategy Analytics.
The Strategy Analytics' report notes the rise of Chinese smartphone vendors as dominant force in the mobile industry but it doesn't discuss Samsung's woes this quarter. The biggest takeaway is the fact that Apple is way ahead of Android OEMs in terms of profit despite the decline in sales.
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