Only Apple made profits from selling phones in Q3

Apple netted the entire smartphone industry's profits in the third quarter, says a report from BMO Capital Markets.

The fall of Samsung's Galaxy Note 7 ensured the entire industry's profits went to Apple this time.

According to Tim Long, who is analyst at BMO Capital Markets, Apple and Samsung usually share the entire profits of the smartphone industry with other smartphone companies either lagging behind or not making any profits at all. With the fall of the Galaxy Note 7, Samsung couldn't repeat the stellar performance of the second quarter and ended up with just 0.9% of the total smartphone industry's profits in Q3.

One in every four iPhones sold in Q3 was an iPhone SE!

Despite recording a fall in sales of iPhones by 5% compared to the third quarter of last year, Apple still gained an unbelievable 103.6% of the industry's profits, followed by 0.9% by Samsung. Despite not performing on expected levels, Apple still turned out to be the only profitable smartphone company in the United States which explains how stagnated the market is. Even the likes of HTC and LG couldn't make any profits in the quarter despite the launch of phones like the Desire 530 and the V20 which shows how iPhones have survived the storm so far.

During Q2, Apple earned 70% of the total profits of the smartphone industry with Samsung grabbing the rest. In terms of unit sales in the just-concluded Q3, Samsung sold 21.3% of all smartphones while Apple sold 13.2%, not far ahead of Huawei at 9.7%. Overall, smartphone sales rose 2.1% globally during the third quarter compared to the same period in 2015 but companies are still struggling to reap much profit from enhanced sales.

"Samsung had a weak third quarter, owing to halt and recall of the Galaxy Note 7. After registering the highest operating margin since early 2014 last quarter, Samsung’s profitability fell to near-breakeven levels in September. Samsung’s market share slipped to 22% of global smartphone shipments in the quarter, and we model share to fall to the lowest level since mid-2011 next quarter,” said Long.

Smartwatch sales hit by Apple Watch release delays

Thanks to the success of Galaxy S7 and S7 Edge, Samsung sold as many as 76 million smartphones during the second quarter globally compared to just 44 million iPhone sales in the same period. Samsung's overall market share hasn't suffered much in the following quarter but because of the losses incurred on the expensive Galaxy Note 7, the company's profits have tumbled, even resulting in losses in certain markets.

If we look at the UK context, love for iPhones seems to be much greater than anywhere else in the world. According to a recent research report by Kantar WorldPanel ComTech, Apple iPhone SE was the top selling smartphone in the UK in the second quarter of 2016, followed by iPhone 6S.  Sales of Apple's iPhone SE and iPhone 6s stood at 9.2% and 9.1% of all smartphone sales in the period, pushing up Apple's share in the UK market to 37.2%, up from 34.1% in the first quarter. While the overall share of Android in global smartphone sales is 86.2%, Kantar claimed that Android's market share in the UK is just 57.3%.

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