Apple’s Share of Smartphone Industry’s Profits Soars to 92%

Roughly 1,000 companies make smartphones. Just one reaps nearly all the profits.

Apple recorded 92% of the total operating income from the world’s eight top smartphone makers in the first quarter, up from 65% a year earlier, estimates Canaccord Genuity managing director Mike Walkley. Samsung Electronics took 15%, Canaccord says. Apple and Samsung account for more than 100% of industry profits because other makers broke even or lost money, in Canaccord’s calculations. Apple’s share of profits is remarkable given that it sells less than 20% of smartphones, in terms of unit sales. The disparity reflects its ability to command much higher prices for its phones. Its rivals mostly use Google Inc.’s Android operating system, making it harder for them to distinguish their offerings, and prompting many to compete by cutting prices. Moreover, Samsung and HTC have made missteps in recent years.