Apple, Samsung Capture All Of Industry's Smartphone Profits (zdnet.com) 161
Continuing to operate on razor thin margins, smartphone manufacturers other than Samsung and Apple are bleeding money. Apple accounted for 75 percent of the smartphone's profits in the second quarter this year, down from 90 percent a year ago, according to Canaccord Genuity. Samsung, which has reported strong sales thanks to its Galaxy S7 series of smartphones, accounted for more than 30 percent of the industry, the research added. ZDNet reports: While this tale could revolve around Apple vs. Samsung the larger question is this: Why would any company want to make smartphones? Let's get real. All the profits go to Apple (high end) or Samsung (high end and scale). The rest of the players in the market don't make money and get disrupted by whatever vendor is flavor of the month? Remember that Xiaomi was supposed to be the next big thing in China and elsewhere, but is now being disrupted by Oppo and Vivo. A quarter from now Oppo and Vivo will be thumped by some smartphone manufacturer we haven't heard of yet.
Stop chasing the shiny (Score:5, Insightful)
Then they need to ask themselves what device accomplishes these tasks, and then start comparing extra features that cost more along with various price points.
After they've done all that, basically identified needs, wants, what's superfluous, then they're in a positon to actually make a choice.
We tend to be a bit conservative with our spending, using devices until they stop working, and in some cases doing a bit of home repair to keep them going when there are problems. I used an HTC Dream until the "A" key quit. We used Galaxy SII phones until her power button kept getting stuck where it was engaged, fixed that a couple times before having enough, and I used my SII until something failed and it no longer recognized SIM cards or that it had a WIFI chip. She didn't feel a need for more functionality than the SII so we replaced it with a Galaxy Core Prime, and I wanted durable without needing a case so I went with the Kyocera DuraForce XD. She spent around $200, I spent around $400, both a far cry from the $700 phones that are so common, and I expect these will give us many years of good service.
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.
Re: (Score:3)
"Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was."
While practical and intelligent, that is not the American Way (according to Madison Avenue and big corporations)! That's communism! Forget thinking and comparing and saving for the future and choosing wisely, just spend spend spend!!!!!!!!
Re: (Score:3)
that is not the American Way
Nor is it the European Way. Or the Asian Way. Or anywhere else.
Re: (Score:2)
Lots of people buy non-shiny phones based on their features, which is why Chinese brands are on the rise. Same quality, same shine apart from the logo, but 1/3rd the price and with lots of the amazing features like an SD card slot, large battery and headphone jack. They even push out software updates occasionally.
Anyway, I didn't read TFA but the summary apparently can't add up or doesn't understand what a percentage is, and the headline is clearly horseshit because there are many profitable smartphone make
Re: (Score:2)
Re: (Score:2, Insightful)
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.
Those of us that aren't locked into a fixed set of needs, find that a new phone each year or two is required to meet our new needs. We first used phones to make calls, then we started using them as pocket computers. Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.
Re: (Score:3)
Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.
Is this a need, or is this a want?
Is this something that you need with you all of the time? Is this something that you need your communications device to do?
Re: (Score:2)
If I can afford it why shouldn't I buy stuff I merely want as opposed to need?
Twenty years ago I didn't have a mobile phone at all so I guess I don't need my iPhone now, but it sure makes life easier.
Re:Stop chasing the shiny (Score:5, Insightful)
Now we use them as VR systems, which will drive the need for faster phones with better displays and better positional tracking for years to come.
Is this a need, or is this a want?
That question is irrelevant. If I want to have a device that does something, and I want it enough to shell out the money for it, why in the world shouldn't I?
Your whole premise is that people are somehow wrong if they want a shiny new phone every year. Who are you to tell people what they should want?
Re: (Score:2)
Who are you to tell people what they should want?
Someone with more brain than money?
Seriously now, who are the companies to tell people what they want? it's the same thing. The companies advertise something, the GP advertises something else.
People usually have to be told what they want, hence the rush for the latest we're seeing today. It's simply unhealthy.
Re: (Score:3)
Who are you to tell people what they should want?
Someone with more brain than money?
More likely just someone without either. These phones are obviously discretionary purchases so anyone being asinine enough to differentiate between need and want in this discussion is either not very bright or biased enough in some way to limit their rational thought. Obviously any feature someone "needs" in their smartphone is actually a "want" from a survival or overall life enjoyment standpoint, but that doesn't change the fact the device may need to have a feature for them to buy it.
Swillden was absolut
Re: (Score:2)
Re: (Score:3)
So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.
...
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.
I look at the phone industry and think .. hmm this is looking like how the car industry plays out. Aside from actual safety and engine improvements, is there any real benefit to continually changing styling every year - aside from trying to convince buyers that "new is better"?
Sort of related anecdote. Back in the 80's or 90's I saw the motorcycle industry basically go from shiny chrome to matt black and then back to shiny chrome. With both transitions being heralded as "great new styling".
Re: (Score:2)
I look at the phone industry and think .. hmm this is looking like how the car industry plays out. Aside from actual safety and engine improvements, is there any real benefit to continually changing styling every year - aside from trying to convince buyers that "new is better"?
At least with vehicles there are visible differences. Phones, you have the little rectangle, the medium-sized rectangle, and the big rectangle. The color of the rectangle might be changable or might be enclosable with a case.
Does anyone really care what their phone looks like? Really?
If it's any consolation my vehicles are 21 years old at the newest. My large, powerful sedan is still a large, powerful sedan. My pickup truck is still a pickup truck.
Re: (Score:2)
Re: (Score:2)
iPod was nothing but an "I have money" status symbol. Same with the iPhone when it first came out.
Re: (Score:2)
Re: (Score:2)
Indeed. My wife occasionally tells me that I "need" a new truck. I tell her that the wheels haven't fallen off yet, so it doesn't need replacing.
I'm much the same way with my phone. If I hadn't finally broken it this spring I'd still have the four year-old $60 phone that did absolutely everything that I needed. I do have to admit that the low-light performance on the camera is better on the new one, but that's just a nice-to-have, not a need.
Re: Stop chasing the shiny (Score:3)
The biggest advantage to buying new cars is consistency and ability to plan.
I've been running the same car since 2012. It had a catastrophic engine failure, just a little past the warranty. It cost me $8,000 to fix.
With a leased car (or a new car), I know exactly what my costs are, and if it breaks (like mine did on occasion during the warranty period), it's not my problem - it's theirs.
Re: (Score:2)
So buyers need to start asking themselves what they actually want this thing that they're carrying around eight to sixteen hours a day, and often sleeping next to the remaining eight, to do.
Why?
I'm playing devil's advocate because I'm more like you than like "most buyers", but again, why? Why do buyers NEED to ask themselves that question? What's the dire consequence of them perhaps wastefully spending some of their disposable income on redundant version++ hardware?
It's about as sensible a statement as saying "people need to stop wasting money on stadium tickets to football games, hockey games, and concerts." Gratification is gratification.
Re: (Score:2)
Because with phones, unlike more classical ways of entertainment (games, concerts, etc), people are suffering from what I'd like to call "sheepification". It's peer pressure forcing them to buy the 700 dollar phone they wouldn't otherwise need, many times that expense is straining them financially and they're making sacrifices elsewhere just to stay afloat socially speaking. It's ridiculous.
Re: (Score:2)
Yea, because attempting to change all of society is going to work /s. People are going to keep doing what they're doing, if companies want to capitalize on it, they need to make their product more attractive to potential customers.
Re:Stop chasing the shiny (Score:4, Insightful)
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.
New high end smartphone is $200 on contract in the US. That's about $17/mo to have the latest, fastest phone with all the newest features. For a device that I use constantly and carry around eight to sixteen hours, that is essentially nothing. That's between one and a half and three cents per hour.
I understand everyone has a different set of financial circumstances, but for a device that useful, that we spend that much time using, why NOT have the latest and greatest, if it's well within your financial means? I'm not talking about buying a $100,000 car here. We're talking about $100/year for a device that most people use very frequently.
Re: (Score:3)
why NOT have the latest and greatest
Have you ever considered where your old phone goes after upgrade? Here's a hint .. it doesn't just magically disperse back into its raw materials with no impact to the environment. E-Waste is a big problem, and not having the latest and greatest is an important part of tackling it.
Remember the3 R's: Reduce, Reuse, Recycle. The are actually in this order for a reason. First you reduce, then you try and reuse. Recycling is only the last step in the process after the other 2 have steps have been exhauste
Re: (Score:2)
Re: (Score:2)
I hope you are not really that stupid. Your phone cost 200? Do you really believe that? What does your monthly service cost? And how much would that service cost if you paid full price for your phone? There is no 'high end smartphone' that costs less than $500.
My phone cost $500 and my service costs $30/month (Nexus 6p, Google Fi network). Which of us pays less after two years?
Re: (Score:2)
How about I spend my money how I want? (Score:2)
and you spend your money how you want. Maybe you don't approve of how I spend my money, but on the other hand I don't approve of how you're a smug condescending assclown.
Re: (Score:2)
I agree in principle, but my work pays for my phone and lets me upgrade every 12 months so I take advantage of it even when my "old" phone is perfectly serviceable. However if I was having to pay out of my own pocket I'd probably never have a smartphone to begin with ;-) People are shocked to learn that my wife does not have a phone, but we simply aren't willing to pay the exorbitant prices (either for the phones or for the data plans). Shockingly it turns out to be perfectly possible to survive in this wor
Re: (Score:2)
Re: (Score:2)
90% of people don't operate on "needs". The other 10% are either poor (need and frugality is enforced by harsh boundary conditions), or they are headed to financial independence where they will be just as happy (or happier) as the 90% until they "retire", then be about double as happy once they hit financial inpendence and are either working on what they love, or retired entirely.
Wasting over well over a grand a year on a new shiny phone with a massive data plan so you can stream cat videos to numb the pai
Re: (Score:2)
Replace the electronics when it's actually dead or doesn't meet your needs, not just because it's not as shiny as it once was.
The problem that you, like most tech-savvy posters on /. have is that you can't understand what the average consumer's "needs" are. Many people just like the thrill of buying a new product. Couple that with the slight gains or improvements (in the products functionality, in your own social status, etc) that are to be had, and it is pretty apparent why people routinely buy new things even when they don't, in your opinion, "need to".
Of course, this is why most of us here work in tech, and not in sales or mar
Re: (Score:2)
Cost? What cost? We pay x number of dollars per month for a plan and after 2 years a new phone magically appears. There is no cost.
Well yes there is a cost, but not a direct one that people see hitting their budgets.
Re: (Score:2)
Re: (Score:2)
So most people then? Those who's idea of saving is their next holiday, and who's idea of retirement is just that, an idea.
You are of course right and that's the truly sad part.
Re: (Score:2)
I'd counter that by pointing out that my phone is the single most-used piece of technology. Setting aside its communication functions the sheer number of devices it has replaced makes it a with: camera, videocamera, PDA, iPod, alarm clock, car GPS. It's also my notebook, address book, and calendar. It controls my lighting and my TV. It tracks the quality of my sleep and replaces the white noise generator that I used to use to get there. It's the hub where that sleep data goes, along with the data from
Re: (Score:2)
I am fine with this old iPhone 4S I got for free. It prevents me to play games like Pokémon Go since it crashes and is unsupported. Also, its battery life sucks. :P
Re: (Score:2)
Most people unfortunately ju
Re: (Score:2)
As someone who had an Apple 3gs and then a 4s, then said "I don't really ~love~ my apple, so I'll go Samsung Galaxy S6" ... and then realized how much crapware Samsung and the carrier piled on it.. then when I saw how long it took to get StageFright updates out.. I realized just how useful it was having Apple directly updating stuff.
TL;DR: this is why I think I'll go back to Apple when my contract allows it and I'll stick with it despite not really loving Apple.
Re: (Score:2)
That's why I go with the unlocked Nexus devices. These are the reference Android installs, and the only thing they come with is the stock Google apps like Chrome, Calendar and the mail app. While Samsung may make pretty attractive hardware, I have little interest in the crapware and the odd changes they make to the UI and default apps.
Re: Stop chasing the shiny (Score:2)
The non-replaceable batteries are more a function of being smaller and smaller. With quick charge, it's less necessary the first few years, and it's actually not too hard to replace the batteries with the right tools, or going to a shop.
As for the upgradable storage, that was more a function of the OS than anything else. Memory cards were originally mass storage devices running variants of FAT. While convenient, this caused a lot of problems - the Android security model requires processes not writing to
Re: (Score:2)
Personally I prefer to pay up front for the phone, get a cheap contract and be done with it.
Like now my new OnePlus 3 with a €14
No surprises there (Score:4, Interesting)
Re: (Score:3)
That depends on your definition of success.
Start a business. You take a pile of money (possibly a loan), use it to set up operations, and run for a while. Three, five years go by, and you struggle just to hold up. Your balance sheets get worse over time, until you can't keep all the creditors satisfied; then you file bankruptcy. Failure, right?
From one perspective, while in business, you supplied a valuable product or service. People bought enough that you stayed in business for five years. You did
Re: (Score:2)
Re: (Score:2)
Disruptions to the 1000 employee lives are the social failure
Economics are demand-side: all jobs are paid for out of revenue, and thus out of consumer spending. Population grows in lack of scarcity, and tends to exceed employment opportunities by a margin--that's unemployment. There's 40% workforce turnover in the United states: 4 of every 10 people will leave their job this year, which means open job opportunities everywhere waiting to be filled; and that doesn't *create* jobs, so there are still not enough jobs for everyone to get a job.
The people who are un
Re: (Score:2)
If you really cared about efficiency and optimization you would support full automation and immediate reduction of the world population to the size of 20M to 200M with mandatory sterilization of the remaining 98%. Children should be planned and produced as any other goods in vitro and all the robots and automation will do menial work and people will have all their needs provided for. All the people would do is research of new technology, which the autom
Re: (Score:2)
Those solutions are not optimal. Full automation at a rapid pace creates a distribution problem: it can only produce and distribute goods with a command economy, which is ineffective at managing the large amounts of data required to maximize growth. Technical progress would slow.
Reducing population size isn't efficient; it's reductive. It's like saying that you could make your car more efficient by driving it less: you would simply drive less, and still get 17mpg. This would leave you less-wealthy
Re: (Score:2)
The jobs you provided came from your revenues, and those revenues took away from other businesses, so you stole jobs rather than creating them (not destroyed; instead of 1,000 new employees at Verizon, there were 1,000 employees at NewMobile)
And there is where your whole argument falls apart, if NewMobile employed 1,000 people off of that revenue, Verizon would have employed a significantly smaller number. All of the statistics show that small businesses employ more people per dollar of revenue than big businesses.
Re: (Score:2)
Perhaps true; and that doesn't debase my argument. If NewMobile employed 1,000 people and Verizon, being more-efficient, lost fewer in equivalent operations, then the remaining balance would be taken from other businesses. Those businesses aren't necessarily mobile; maybe you spend more on phones, and you can't spend as much on fancy shoes.
The point is jobs are paid for from revenue, and so consumer spending supplies jobs. You get more jobs with population growth (more people) and improvements in an ec
Re: (Score:2)
I somehow doubt this is accurate (Score:4, Interesting)
Re:I somehow doubt this is accurate (Score:4, Insightful)
Revenues do not equal profits.
Re: (Score:2)
Re: (Score:3)
Re: (Score:2)
Your investors, for one.
Re: (Score:2)
As long as one of your expenses is the salary you pay yourself, and you don't have or don't give a damn about other shareholders, who cares about profit?
Re: (Score:2)
you can't just "not give a damn about other shareholders". if you have other shareholders, you likely answer to a board of directors. if the BOD isnt' satisfied with your performance, then they'll fire you.
Re: (Score:2)
Re: (Score:2)
Mobile Phones (Score:3)
So Mobile phones are sold with very narrow margins, as they always have been, except for one or two premium products which are heavily marketed and sold at premium prices even though they are not much better than some of the others
Sounds like every othe industry ...
Re: (Score:2)
Exactly. Smartphones will soon be just another home electronics commodity like DVD players, PCs, TVs.
What was not normal was the 50%+ profit margin on phones, an anomaly in the market that will soon be fixed. Capitalism at work.
Re: (Score:2)
I think that will depend on the VR industry. Currently most of the VR headsets work off a smartphone, generally a Samsung one. VR porn is supposedly absolutely amazing and studios are starting to put out titles that really take advantage of its abilities. If the VR industry starts putting out decent cheap headsets that don't require a phone (and there's no reason for them not to, the electronics are cheap now) we may see smartphones become commodity devices, the way they should be. If they keep relying
Re: (Score:2)
VR is a gimmick, just like it was when it came out in the 90's. It will go the way of 3D TV soon enough. I don't follow porn or the porn industry, so I can't comment on that.
Aside from tech sites, I don't know of anyone who even knows whats going on with VR, nor cares.
Re: (Score:2)
But. This. Is. Slashdot.
Where we don't really have any clue about how business works, but that doesn't stop us from ranting and raving and bitching anyhow.
Meh (Score:2)
Fuck that. Only reason they are so profitable is because they charge an arm and leg for them.
I'll stick with my OnePlus One that was only 300$ thank you (still has more or equal "power" than the latest galaxy or iphone) and above all, i've dropped this sucker 100+ times (without a 100$ 1" thick case) and it hasn't splintered into a 100 pieces like the more fragile than glass iphones.
New math? (Score:4, Funny)
If Apple accounts for 75%, and Samsung 30%, that equals 105%... does not compute
(Yes I know, they specified Profits for Apple, poor writing by the author actually)
Reading comprehension (Score:2)
75% of profit.
30% of market share.
Re:Reading comprehension (Score:4, Insightful)
Apple accounted for 75 percent of the smartphone industry's profits in the second quarter, but that's down from more than 90 percent a year ago due to Samsung's Galaxy device lineup, according to Canaccord Genuity. Samsung's Galaxy S7 launch and the Note 7 follow-up likely indicate that profits will continue to do well, said Cannaccord Genuity analyst T. Michael Walkley in a research note. The other item that may ding Apple's industry profit is that customers are delaying purchases ahead of the iPhone 7 launch. Add it up and Samsung has captured more than 30 percent of industry profits in the second quarter.
Re: (Score:2)
Yup, I didn't RTFA. Also, whoever wrote that article called it "profit" in one place and "industry share" somewhere else.
Reading more closely it appears that neither the 75% nor 30% are a share of profit though. They're the companies' the share of industry wide operating income, which has little to do with profit anyway.
Re: (Score:2)
They have a much smaller market share than 30%.
Re: (Score:2)
You lack reading comprehension if you didn;t read my whole post. You must be an Apple zombie
Re:New math? (Score:4, Informative)
Because everybody else together is making a loss.
Let's pretend the total profit of the entire smart phone industry is $100. We look at Apple's profits and find they are $75. We look at Samsung's profits and find they are $30. We look at everybody else and find that, in total, they are losing $5 between them.
Re: (Score:2)
Ah. That makes sense, thanks.
Too bad for Sammy (Score:2)
Re: (Score:2)
Re: (Score:2)
Why would any company want to make smartphones? (Score:2)
Smartphones are becoming the electronics version of the airline industry in the 60's and 70's Jet Age. More people do it for the cachet than anything else.
LG (Score:2)
Why make smartphones? (Score:2)
Re: (Score:2)
Most phones aren't $600
Why compete if there are no profits? (Score:2)
I smell BS (Score:2)
You can get a very decent, usable Android smart phone for less than $100.
So, either the article grossly misrepresents the facts, or brands like Motorola, LG, HTC really, for some inexplicable reason, cannot make a profit on a $500+ phone.
Re: (Score:2)
Remember remember... (Score:2)
Sorry this drives me nuts. (Score:2)
"Apple, Samsung Capture All Of Industry's Smartphone Profits"
Who is "Industry's" What company is "Industry"?
If you said "the Industry's" I could assume you meant the smartphone industry since that was the topic but just "industry's"?
"Apple, Samsung Capture All Of the Smartphone Industry's Profits" ,.....solved.
Wither LG? Good phones, no market share? (Score:2)
They are both scummy companies and shouldn't be trusted. It's Nexus or nothing.
Not sure why you're trusting Google here. Are you disassembling the binaries in your Android operating system*? If not, then you have no idea what Google's doing there to use the sensors you've got strapped to your body 24/7. The only safe smartphone is one that doesn't have sensors at all, and has a physically removable antenna and battery or physical off switches for both.
(*And face it, no body is. Even if, in principle, it's possible, no one is *actually* doing it before use except security researchers.)
Re: (Score:2)
When you say "Controlled by a small group of people", do you mean the collective worldwide shareholders of Apple and Samsung?
Re: (Score:2, Interesting)
No, I mean the major shareholders of Apple and Samsung.
The limit seems to be 105% (Score:3)
Re: (Score:2)
Here. Have a $2 case for your phone for if you ever drop it.
I bought mine on my smartphone, we have this thing called "online shopping" nowadays.
Seriously, though, with the exception of stupid people doing stupid things to their phones (like wandering around without cases or putting them on the toilet while they flush, etc.) and shitty Apple screens that cost a fortune to repair, it's really not that big an issue. I've never broken a phone screen. Ever. I've destroyed any number of laptops (usually by t
Re: (Score:2)
I hadn't used a case at all on my old personal iPhone5 for the past year and a half; one minor drop, no damage at all. However, the wife had a case on hers and still managed to crack the screen. Ah well. Have a new 6s now, I did get a case for that. But I don't run out and get the new shiny every 2 years, I usually give it twice that, but eventually
Re: (Score:2)
This is why I still read /. smartphone threads... (Score:5, Insightful)
because I am endlessly entertained by just how completely clueless the typical /.er is about why some electronic products succeed while others fail.
People don't buy iPhones because of benchmarks.
Re: (Score:2)
You sir, are correct. I wouldn't have been quite as harsh as you, but I was about to respond and say more or less the same thing.
Re: (Score:2)
Did I say benchmarks? No I did not. I said iPhones have had roughly double the speed of anyone else for the last 3 years. In other words, that the user experience is more enjoyable. The GUI is snappier. Jumping around between apps and tasks is quicker. People love their iPhones because the workflow is more responsive and they are able to get more done faster. In other words, because the user experience is more seamless.
If you think seamlessness of user experience doesn't matter than you are the one w
Re: (Score:3, Interesting)
2. I like my current iTunes setup, playlists, etc
3. I was impressed by the camera on the current model
4. I agree with my wife about the auto-correct s
Re: (Score:2)
Apple hardware is good, no question, but their software is no better than others, you can always find certain apps from one side or the other that appeal to a group of people but it doesn't (in)validate a system.
About ease of use, I hate the illogic operation of the companies iPhone 4 and prefer to use my Android, until recently a Nexus4, now a OnePlus 3.
Yes people are different.
The Android market is not fractured (fragmented) but diverse, in genetics
Re: (Score:2)
Re: (Score:2)
A win for Android is a win for Google.
The play store (and the app store) make so much more money than the hardware its not even funny.