[aMorePerfectUnion]

The figures given here relate to profits generated by handset makers, not the services ecosystem and potential profits made by app publishers and others. Overall, smartphone profits were up 31.4% compared to the same quarter a year ago.

When it comes to who is performing best among Android OEMs, the results reveal growing competition for Samsung.

Neil Mawson, research director for Strategy Analytics, says the “three big profit drivers” for Android are Samsung, Huawei and Xiaomi.

“Samsung is the Android giant that delivers most of Android’s smartphone profits worldwide,” he tells me. Mawston says the company is not breaking out exact shares, except to say that “Samsung accounted for well over half of all Android smartphone profits globally in Q4 2014.”

As a point of comparison, in 2013, Samsung accounted for 95% of Android profits. That was a time where there was significantly more parity between Apple and the Korean handset maker both in terms of unit sales and revenues, with Apple accounting for “only” 57% of profit at the time.

It’s not too surprising that Apple — which last quarter had the most profitable company of any quarter, ever — is dominating in smartphone profits, but what is striking is just how wide the gulf has become.

The bigger picture seems to be that Android handset makers are in something of a race to the bottom at this point: the markets that are driving growth in smartphone adoption these days are emerging economies, where consumers are price sensitive. That’s leading to the production of a number of models that are pushing down the average sale price for devices, which long ago dropped below the $100 mark.

Apple may have missed the boat (so far) when it comes critical mass in market share in these developing markets, but it has more than made up for it by making a killing in places where it is strong. China is one such crossover example. While there is clearly a market for lower-cost and Android devices, Apple has been posting record sales in the country, reporting sales of $16 billion in the country in Q4. (China is not — yet — however overtaking Apple’s sales in markets like the U.S.)

In the world of smartphones, Android’s gains do not equal Apple’s loss. But Android’s gains might translate into Android losses down the line, Strategy Analytics notes.

“Apple’s strategy of premium products and lean logistics is proving hugely profitable,” Mawston writes in the report. “Android’s weak profitability for its hardware partners will worry Google. If major smartphone manufacturers, like Samsung or Huawei, cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen or Firefox.”

[aMorePerfectUnion]

“Apple’s strategy of premium products and lean logistics is proving hugely profitable,” Mawston writes in the report. “Android’s weak profitability for its hardware partners will worry Google.”

Money sentence. Literally.

[Pearls Before Swine]

“We’ll make it up on volume.”

Or, this is an ongoing and very interesting study on market segmentation.

[Democrat_media]

Android has 80% of the smart phones world wide.

Steve Jobs is gone and Apple’s days are numbered

80% market share : do the math.

[ican'tbelieveit]

Love my new Samsung Note. It is a slick, well performing device.

[Star Traveler]

Hey Swordmaker, an article on Apple gobbling up ALL THE PROFITS for the smartphone market. It makes you wonder why those other companies EVEN BOTHER being “in business. AND, it also makes you realize that those other companies are not going to put much effort into making a better product when there is hardly any money to be made by them!

[Will88]

Apple is simply in a position where brand preference allows them to premium price devices produced in cheap labor nations. It’s the formula for high profits as long as their customers are willing to pay their prices.

[bigbob]

Totally different business models

[fuzzylogic]

Of course, Android OS is open source and allows for market competition across vendors. This drives down cost (and profit) making great devices available to more people as well as keeping Apple honest and making great devices at a premium.

Capitalism at its best. Do you want a Porsche, BMW, Ford or a Skoda? Apple is more like a Porsche, Samsung BMW, with other Android devices available for dirt. Android provides more price points for products allowing people to buy what they can afford. This doesn’t worry Google and I disagree with some of the analysis. Long term it might be difficult for people to justify the cost of an Apple device, 99% of desired features will be available in a cheap device - which will be Android based.

I’m an Android guy, I don’t believe the Apple premium is worth it - especially considering the “walled garden” they keep you in. If you’re ok with the costs then Apple does provide a better unified experience across devices/technologies. I love my S5 and don’t want to be trapped in (and controlled by) a proprietary Apple world.

[gop4lyf]

I tried the iPhone thing when it came out. When the next upgrade time came around, I switched to Android and have been happy ever since. On my 3rd Android phone now, and each has been better than the last.

[Swordmaker]

89%
The Percentage of Profits that Apple took home of
the entire phone handset market!
PING!

Apple takes the lion's share home Ping!

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