AppleInsider’s Daniel Eran Dilger has recently taken an interesting jab at a series of market estimates made by Strategic Analytics, which regarded the profitability of Samsung’s smartphone business as being significantly higher than Apple’s.
According to the research firm’s latest statistical findings, Samsung not only produced the most number of smartphone phone devices during 2Q13, it also earned the highest operating profit for its entire handset division, which is estimated at around $US 5.2 billion. Apple, by comparison, is mentioned as having made only $US 4.6 billion in operating profit, putting it at a notable spot behind Samsung. This disparity in earnings has led Strategic Analytics to conclude that the Korean company “has finally succeeded in becoming the handset industry’s largest and most profitable vendor.”
In taking a more closer look at the information presented by Strategic Analytics, Dilger has found a series of statistics that are not just researched un-thoroughly, but also present Samsung’s and Apple’s smartphone profit situation in a misleading fashion. Below are some of the interesting points and details that have been brought up by Dilger throughout his article:
- Contrary to popular notion, neither Samsung nor Apple are known to divulge explicit details about their profit shares. The Korean company, on the one hand, likes to keep to itself the actual sales numbers for its smartphones, tablets, cameras, and other electronic devices. Apple, meanwhile, consistently reports the sales of its products, but doesn’t actually break down the profits earned from each of its individual product lines.
- In Strategic Analytic’s market report, the earnings figure from Samsung’s entire “IT & Mobile Communications (IM) segment” is inappropriately compared with that of Apple’s iPhone segment. Dilger perceives this to be problematic, given that the Korean giant’s “IM” division manufactures a wide assortment of products other than smartphones, including tablets, chromebooks, and various network devices.
- Strategic Analytics, throughout the entire report, never actually specified how it managed to come up with the iPhone’s “US$ 4.6 billion” profit figure. It is suspected that the research firm simply divided Apple’s total income (US $ 9.2 billion) by two, as iPhones account for approximately 50% of Apple’s entire business. In doing so, however, Apple’s profits from iPhones are inappropriately assumed to be equal to those of its other business divisions; the earnings of Samsung’s entire business division, as such, is essentially being compared with “only half of Apple’s.”
- Various websites (ie. Businessinsider) have mistakenly used Apple’s after-tax net income in comparison with Samsung’s pre-tax operational income. This has caused the notion of Samsung higher-than-Apple profits to spread even more.