Apple to Samsung: Your Market Share Is Strong, but My Margins Are Unstoppable

According to IDC, Samsung surpassed Apple in the first quarter to become the world’s largest smartphone manufacturer; Samsung shipped 42.2 million smartphones to Apple’s 35.1 million. But Cupertino retains another, far more lucrative title: Smartphone-market revenue leader.

New data from Juniper Research shows that Apple’s revenue from the iPhone in the first quarter topped out at about $22.7 billion — a fair bit more than the $17 billion Samsung made from its entire handset portfolio, smart and feature. So while Samsung may be winning on global smartphone shipments, Apple is winning on a more important metric: Smartphone profitability. And for a very simple reason: The company has the highest margins around.

Reporting second-quarter earnings last week, Apple said that its gross margin was 47.4 percent. Meanwhile, Samsung’s was just under 13 percent. So, while Samsung is dominating smartphone shipments, Apple is dominating the smartphone industry’s pool of profits.