Apple snags almost 90 percent of smartphone profit
New report shows that Apple dominates Android in profits, even though Android is easily the most widely used globally.

Apple hauled in 89 percent of global smartphone profit in the final quarter of 2014, according to a new report published Thursday by Strategy Analytics.

The numbers are impressive considering studies show more than 80 percent of smartphones shipped last year ran on Google’s Android mobile operating system

Global smartphone profit hit $21.2 billion in the fourth quarter of last year, a 31 percent increase from $16.2 in the same period of 2013.

Android smartphone manufacturers’ race to the bottom appears to be severely hampering their bottom lines. Profits decreased more than half compared to last year, said the report.

"Android hardware vendors combined took a record-low 11 percent global smartphone profit share, down from 29 percent one year ago,” Linda Sui, director at Strategy Analytics, said in a statement. "In contrast, Apple iOS captured a record-high 89 percent profit share, up from 71 percent in Q4 2013.”

But what is bad for Android is fantastic for Apple.

"Apple iOS continues to tighten its grip on the smartphone industry,” noted Neil Mawston, executive director at the firm. "Apple's strategy of premium products and lean logistics is proving hugely profitable.”

The weak profitability for Android could cause rifts between Google and its hardware partners, like Samsung or Xiaomi. If manufacturers can’t turn a profit on Android, Mawston added, they might move away to software from Microsoft, Firefox or Tizen – Samsung’s in-house mobile platform.

While these alternative operating systems showed barely any traction in Strategy Analytics’ profit report, manufacturers must be wondering if Android’s continued dominance means anything if it doesn’t bring back revenue.

Apple, of course, is poised to take over another young market.

The company sent out invites for a March 9 product event, telling attendees to "spring forward.” Most likely, the event will be dedicated to launching its Apple Watch wearable.

AA
Last Modified: 2015-02-27 11:14:49
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