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Friday, July 26, 2013
 Samsung Becomes World's Most Profitable Handset Vendor in Q2 2013
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Message Text: According to a research from Strategy Analytics, Samsung became the world's most profitable handset vendor in Q2 2013. Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.

Neil Shah, Senior Analyst at Strategy Analytics, said, "We estimate Samsung's operating profit for its handset division stood at US$5.2 billion in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion. With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor."

Neil Mawston, Executive Director at Strategy Analytics, added, "Apple's reign as the world's most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013. Apple's profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013."

Global smartphone shipments grew 47 percent annually to reach a record 230 million units in the second quarter of 2013, Strategy Analytics said.

Samsung captured one-third of all smartphone volumes worldwide, while Apple's marketshare fell to its lowest level for three years.

Neil Mawston, Executive Director at Strategy Analytics, said, "Samsung grew 56 percent annually and shipped a record 76.0 million smartphones worldwide, capturing 33 percent marketshare in Q2 2013. Samsung shipped over two times more smartphones than Apple during the quarter. The flagship Galaxy S4 model experienced solid demand in China and worldwide and helped to lift volumes. Samsung's next major flagship launch is likely to be the rumored Note 3 model later this year. Apple shipped 31.2 million iPhones worldwide in Q2 2013, up from 26.0 million a year earlier. Apple grew just 20 percent annually during Q2 2013, which is less than half the overall smartphone industry average of 47 percent. Apple's global smartphone marketshare of 14 percent is at its lowest level since the second quarter of 2010. The current iPhone portfolio is under- performing and Apple is at risk of being trapped in a pincer movement between rival 3-inch Android models at the low-end and 5-inch Android models at the high-end."

Linda Sui, Analyst at Strategy Analytics, added, "LG was a star performer as global shipments doubled year-over-year to 12.1 million units in Q2 2013. LG captured 5 percent share and maintained its position as the world's third largest smartphone vendor for the second straight quarter. The popular Optimus and Nexus models have been the main drivers of LG's success. If LG can expand its retail presence and marketing in major countries such as the US or China, LG could quietly start to challenge Apple for second position."

Other findings from the research include:

- ZTE shipped 11.5 million smartphones worldwide for a record 5 percent marketshare in Q2 2013. ZTE became the world's fourth largest smartphone vendor for the first time ever in its history. Growth was driven mostly by a strong performance in the huge China market;

- Huawei shipped 11.1 million smartphones worldwide for 5 percent marketshare in Q2 2013. With Huawei in fifth position, ZTE in fourth, LG in third and Samsung in first, the global smartphone market is now clearly dominated by Asian-based brands.
 
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