Samsung reaps fraction of Apples phone profits

The Chosun Ilbo

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(THE CHOSUN ILBO)Apple accounted for a staggering 84 percent of the total profits earned by global smartphone makers this year, while rival Samsung's share was only 16 percent even though it sold 40 percent more phones.

Credit Suisse on Friday said global smartphone makers achieved a combined operating profit of US$58 billion. Apple's share of that was $48.7 billion or 84 percent and Samsung's $9.28 billion or 16 percent.

The other firms combined achieved a minimal share that, tallying profit and loss, amounted essentially to zero.

Samsung sold 329.5 million smartphones this year and Apple 233.9 million. Yet Apple made $208 profit on every phone it sold, while Samsung earned a paltry $28.

This gap stems from the fundamental difference in their lineups. Apple develops both its own hardware and key software and rolls out only one or two new premium smart devices annually. Samsung manufactures primarily hardware, uses Google's OS and rolls out more than 100 different types of smartphones each year, ranging from low-end to premium products.

Apple is more profitable because its unit cost of production is much lower than Samsung's. "Samsung needs to strengthen its software and contents for smart devices," said Jeong Ok-hyun at Sogang University.