Samsung shipped about 50 million smartphones last quarter — about double the number Apple sold and, according to IDC, the largest number of units ever shipped by a handset vendor in a single quarter. But does it matter?
Because when you look at the broader mobile industry, Apple — thanks to the higher gross margins of the iPhone and iPad — far outshines its rivals in both revenue and operating profits.
Though it shipped only about 6 percent of the industry’s smartphones and tablets in the second quarter, Apple captured about 43 percent of the industry’s revenue, according to Raymond James analyst Tavis McCourt. And it generated an astonishing 77 percent of the industry’s operating profits. This, even in a seasonally weak period for iPhone sales.
So while Samsung outselling the iPhone two to one is a nice milestone and, no doubt, a point of pride for the Korean company, it’s not the financial victory that it might first appear. Samsung might be the mobile industry’s king, but Apple still rules overall in the most important metric of all: Profit.
“Ultimately, profits are the feedstock of innovation; and, innovation drives profits,” McCourt writes. “Until Samsung starts generating more profits than Apple, we would not be overly concerned with who has the unit share lead. Remember, HP and Dell still sell a lot more PCs than Apple sells Macs, but does it matter?”
Probably not to Apple.