Apple Inc. (AAPL) Is No More World’s Most Profitable Phone Maker

Apple Inc. (AAPL) Is No More World’s Most Profitable Phone Maker
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Apple Inc. (NASDAQ:AAPL)’s battle with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) isn’t over yet but it looks as if they lost another title to their top competitor. According to Strategic Analytics, a well-known research firm, Apple Inc. (NASDAQ:AAPL) is no longer considered the most profitable smartphone maker, that title now belongs to Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).

Apple Inc. (AAPL) Is No More World's Most Profitable Phone Maker

Apple and Samsung’s global profits

Just this past second quarter, the South Korean tech giant’s global profits for their handset made it to $5.2 billion whereas Apple Inc. (NASDAQ:AAPL)’s profits hit $4.6 billion. The only difference between the numbers comes from the non-handset products. The research firm reports that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s success only comes from strong volumes, tight cost controls, and high wholesale prices. Apple Inc. (NASDAQ:AAPL)’s financial downfall can be attributed to competition around the world.

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Neil Mawston, Strategy Analytics executive director, said “Apple Inc. (NASDAQ:AAPL) is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.”

Samsung taking over China’s market

It probably doesn’t help that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is taking over the market in China. Earlier this week, Apple Inc. (NASDAQ:AAPL) claimed their revenue in China (including Taiwan and Hong Kong) has fallen significantly. Their revenues plummeted from $4.65 billion from the last quarter, a decline of 43%. It was also 14% lower from last year. During a conference call with analysts, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook said he wasn’t sure why his company is failing in China. It’s clear that Apple Inc. (NASDAQ:AAPL) needs to do something fast if they want to remain in the market but how they should do it, isn’t so clear.

Right now, Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) has about 19% of the shares in the $80 billion smartphone market, which is estimated to grow to $117 billion in four years. That’s also 10% ahead of Apple Inc. (NASDAQ:AAPL), which has slipped down to 5th place. Cook revealed his company’s plans to increase the number of retail stores within the next two years. The iPhone maker currently has eight flagship retail stores in China and three located in Hong Kong.

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