Samsung Tops Apple in Handset Profits

Although it’s a well-known fact that Samsung (SSNLF.PK) has a much larger share of the global handset market than Apple (NASDAQ:AAPL) does, the Cupertino-based company has always managed to secure the lion’s share of the profits. However, this no longer appears to be true.

According to data from market research firm Strategy Analytics, Samsung has surpassed Apple as the most profitable handset vendor in the world. Strategy Analytics’ definition of “handset” includes feature phones and smartphones.

“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,” wrote Strategy Analytics Executive Director Neil Mawston.

The market research firm notes that Apple was the most profitable handset vendor for almost four years, beginning in the third quarter of 2009. The report also notes that while Samsung’s smartphones have been selling well in the U.S. market, Apple is still being undersold by cheaper brands in the emerging Chinese market.

Apple’s third-quarter results revealed that its revenue in the Greater China market fell 14 percent from the same quarter last year and declined 43 percent from the March quarter this year. According to data from market research firm IDC, the largest year-over-year increase in the smartphone market came from the China-based Lenovo (LNVGY.PK), which had a 130.6 percent increase in shipments over last year.

Meanwhile, Apple’s year-over-year growth rate of 20 percent was the lowest of all the top five smartphone vendors. However, Apple is widely expected to unveil a new budget iPhone, or “iPhone Lite,” this fall that may help it to better compete in the fast-growing, but low-end, Chinese smartphone market.

Here’s how Apple closed out the trading week.

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