Apple, Samsung Capture 96% of Global Smartphone Operating Profits

Apple and Samsung remain the most profitable brands, together capturing 96 per cent of global smartphone operating profits, a report showed on Friday.

Samsung replaced Apple as the top global smartphone player in Q1 2023, driven by its mid-tier A Series and the recently launched S23 series, according to Counterpoint Research.

Apple's shipment decline (year-on-year) was the least among the top five brands as the company recorded its highest-ever Q1 share of 21 per cent.

A man looks at the screen of his mobile phone in front of an Apple logo outside its store in Shanghai, China on July 30, 2017.

Globally, the smartphone market faced further contraction in the March quarter with shipments declining by 14 per cent YoY and 7 per cent (on-quarter) to 280.2 million units in Q1 2023, according to the latest research from Counterpoint's Market Monitor service.

"Smartphone shipments declined further in Q1 2023 following the weakest holiday-season quarter since 2013, as the slower-than-expected recovery in China was marred by alarming bank failures on both sides of the Atlantic further weakening consumer confidence in the face of unrelenting market volatility," said senior analyst Harmeet Singh Walia.

Apple with 58 million unit shipments in Q1 managed to capture nearly half of all smartphone revenues.

Apple outperformed the market due to several factors.

Smartphone Market to Struggle

Firstly, the stickiness of its ecosystem prevents its customers from choosing a cheaper smartphone even in times of economic difficulty.

"Secondly, with sustainability becoming a priority for many, not only has Apple captured nearly half of the secondary market, it is also attracting users who are willing to spend more for longer-lasting devices," explained research director Jeff Fieldhack.

Samsung logo as seen during Galaxy Note 8 consumer launch event in Jakarta, Indonesia September 29, 2017 (Beawiharta/Reuters)

Thirdly, it is the preferred brand for Gen Z consumers in the West and is thereby positioning itself for sustained success.

The smartphone market as a whole, too, is likely to struggle for the next couple of quarters.

"Moreover, the recent decision by OPEC countries to cut oil production may lead to higher inflation rates, causing a reduction in consumers' spending power. As a result, even if the decline in smartphone shipments stabilises, a significant recovery is unlikely before the year-end holiday quarter," said research director Tarun Pathak.

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