Apple Retains Dominance in Smartphone Market Profits in Q3

Apple Inc.'s dominance seems solid despite rivalry in the short term, as the latest report by Canaccord Genuity Inc., a global investment bank headquartered in the U.S., shows the iconic American maker commanded a massive 86% share of global smartphone industry's profits in Q3, 2014.

Such result is 18 percentage points higher than the brand achieved in Q2, surging from 56% a year ago, due partly to new products continually launched in Q3, and particularly sales declines suffered by its rival Samsung.

Samsung saw its share of industry profits plummet 22 percentage points quarter-on-quarter, or 35 percentage points year-on-year, to only 18%, a nadir since 2011, while LG accounted for 2% of the total, according to Canaccord Genuity's report.

Noteworthy is that Apple, Samsung and LG together generated nearly all profits in the industry to blow away the competition, also exposing un-profitability of most of players including Microsoft-Nokia, Motorola and Sony.

HTC and Blackberry both raised  their shares to zero in the quarter, compared to minus 1% and 4%, respectively, a year ago.

Canaccord Genuity estimates Microsoft-Nokia, whose operating system, Windows Phone, is still unpopular, and Motorola, just  acquired by Lenovo, to have lost  US$341 million and US$185 million, respectively, in Q3, equaling industry profit share of minus 4% and minus 2%.

On another front, Canaccord Genuity reports that Chinese branded vendors, such as Xiaomi, together contributed only modestly to the industry's overall profits despite achieving strong sales growth in the vast domestic market, due primarily to  promotions of high-spec, budget-priced smartphones cutting profit margins to either razor-thin or sub-profitability. (SC)

Major Branded Smartphone Vendors' Market Shares
Period	Apple	Samsung	LG	HTC	Blackberry	Microsoft-Nokia	Motorola
Q3, 2014	86%	18%	2%	0%	0%	- 4%	- 2%
Q3, 2013	56%	53%	- 1%	- 1%	- 4%	- 1%	- 3%

Source: Canaccord Genuity Inc.