According to the latest research conducted by Counterpoint Market Monitor in the second quarter of 2018 (April-June), global handset profits increased by 4% per annum in this duration. This is mainly due to Chinese brands. Their combined profits broke the $ 2 billion mark for the first time, contributing nearly a fifth of total phone profits.
We expect the average selling price of smartphones to increase further. However, smartphone volumes are likely to be stable as consumers now keep smartphones longer (at least two years). This is because most of the smartphone manufacturers promise to roll out updates during this period of time. This will have implications for OEM revenues, as OEMs are looking to maximize their profits by increasing their average selling price and entering new price levels. Only vertical integrated companies, in such a scenario, are well positioned to capture trends.
Apple Profit Q2 2018:
Apple remains the most profitable smartphone brand in the world. The company recently reached the valuation of a trillion dollars. Apple obtained 62% of the global earnings of phones during the second quarter of this year. That’s $ 6 billion in profits at $ 30 billion in revenue.
The iPhone X, which inspired a new design language, helped Apple get a significantly higher average selling price in the second quarter, at a time when the smartphone market was starting to saturate. It’s easy for Apple to have good profit margins further because almost all of their phones cost $ 800 or above.
However, despite their dominant market position, Apple’s market share of profits actually decreased slightly compared to their 65% share in Q2 2017.
Samsung Profit Q2 2018:
Samsung faced poor sales in their flagship smartphone Galaxy S9 having a significant negative impact on its results. Samsung’s global share of handsets fell to 17 percent in the second quarter of 2018 from 22.3 percent in the second quarter of 2017. This is the second consecutive year that Samsung’s share of the profits decreased.
Chinese Handset Profit Q2 2018:
Chinese brands have been growing steadily with Huawei and Xiaomi getting a big boost this year.
Huawei’s share of global mobile devices now stands at 8% in the second quarter of 2018, up from almost 4% in the second quarter of 2017. That is more than 107% year-on-year.
Vivo ranked second with a 24% year-on-year increase in the profits of its devices which now represent 4% in the second quarter of 2018. On the other hand, OPPO registered a year-on-year increase of 23% which represents 5%. % of the total.
The biggest winner of this quarter was Xiaomi. Xiaomi’s profit arose rapidly by an impressive 74.7% in the second quarter of 2018, capturing 3% of the global market share of profits!
Chinese brands are offering premium devices at a more affordable price.
Brands like Oppo, Vivo, and Huawei have modified their design language by adding new features. For example, the fingerprint reader on screen in Oppo Find X which also supports Ultra Full View Screen and Huawei’s P20 Pro (triple camera).
Market Summary – Q2 2018:
- Based on this research, the profits of worldwide handsets grew by 4% per annum capturing 11% of total smartphone revenue.
- Apple is the most profitable smartphone brand in Q2 2018. It covers 62% of the market share.
- Samsung comes in the second spot with 17%. Samsung’s profit decreased by 21 % year-over-year because of weak sales of the Samsung Galaxy S9 series. The shipments of S9 declined 24% in the second quarter of 2018 compared to the Galaxy S8 series in the second quarter of 2017.
- Chinese brands, Huawei (8%), OPPO (5%), Vivo (4%) and Xiaomi (3%) were the key Chinese manufacturers grew during the quarter.
- 1% of the total industry profit was distributed among more than 600 handset brands.
And it’s a wrap from us!
Amnah Fawad
Muhammad Nouman Sarwar
