A recent study shows that Apple and Samsung are the only company making any money from smartphone sales.
Cannaccord Genuity recently compiled operating margins for all major smartphone OEMs, and compared them to the company’s mobile device margins. What is discovered is that Apple is the most profitable with a 38 percent margin for smartphones.
Samsung is also highly profitable with a 17 percent mobile device operating margin.
Other notables — not so much. Both HTC and Microsoft run at a 22 percent loss in their mobile divisions. Even LG, which has some of the best Android handsets around, has a five percent loss.
Lenovo, which recently purchased Motorola to help turn its flailing smartphone business around, runs on a 10 percent loss.
Perhaps most interesting is Cannaccord’s long-term view. These figures represent the current fiscal quarter, but it wasn’t the case this time last year. LG’s mobile division was profitable or breaking even at the beginning of 2015, and losses from HTC were much less alarming.
Cannaccord notes its not comprehensive, but any OEMs left off the list was purposeful “due to the lack of available and comparable profit metrics.”
But it’s still an honest, unbiased look at what’s really happening beneath the flashy ad campaigns and announcement events. It’s also hard to argue that a company like HTC should continue its current path.
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