Lucas Riechert - Friday 19 May 2023

Apple and Samsung continue to grow and grab 96% of smartphone market profits

As expected, Apple and Samsung remain by far the two most profitable brands in the global smartphone market. Last quarter, both companies grabbed 96% of the profits made from smartphones.

The numbers don't lie
Research firm Counterpoint conducted research and found that Apple accounted for 81% of total profits in the smartphone market and Samsung accounted for about 15%. The global smartphone market shrank last quarter, due in part to consumers spending longer with their devices. For Apple, there are only positive numbers to report, for example, they recently mentioned that they had record sales for the iPhone. Also, for Samsung, the sales decline was limited by the new high-end Samsung Galaxy S23 models. Similarly, the average selling price of Samsung devices increased slightly.

Consumers with Apple devices do not switch
Apple users generally do not choose to switch to cheaper Android devices, for example. "Apple is better able to weather economic fluctuations than its competitors because the loyalty of Apple users is rock solid." In addition, Apple holds about half of the refurbished market for used devices. Apple mainly attracts users who spend more on devices that also last longer. Also, iPhones are very popular among young people, according to Counterpoint. "Apple is the preferred brand for Gen Z consumers in Western countries."

Chinese competition
The numbers are a bit worse for Apple and Samsung's Chinese competitors: for example, sales of Xiaomi devices fell 22% last quarter. That's partly because China's economic recovery is taking longer than expected. Oppo, of which OnePlus is part, is also still struggling outside China. Counterpoint expects the global smartphone market to remain dominated by Apple and Samsung for the rest of the year and that competitors, especially Chinese ones, will not pick up this year. "A significant recovery is unlikely before the end of the year."

Small app makers do see sales and profits rise sharply
Where we do see a sharp upward trend in profits are the smaller app makers. On average, revenue from small developers for the Apple App Store in Europe grew by as much as 64% over the past two years. Globally, small developer sales grew by an average of about 71%. There was mainly a doubling in apps related to healthy lifestyles. Mainly health, fitness, sports and lifestyle are growing steadily.

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