Apple and Samsung Do It Again

The numbers are starting to come in for how everyone did in Q4. According to Cannacord Genuity, Apple made 69% of the profit and Samsung made 34%. What do you notice about those numbers? They add up to more than 100%. HTC supposedly made 1% of the profit and everyone else either broke even or lost money. Basically Apple and Samsung have rendered everyone else in the market irrelevant and pretty much doomed to run out of money.

In terms of smartphone units, IDC’s numbers have Samsung at #1 with 63.7M units (up 70% on last year), Apple is #2 with 47.89M and a surprising #3, admittedly a long way behind, is Huawei with 10.8M.

Surprisingly, Google’s Android, which accounts for about 70% of smartphone activations, is completely dominated by Samsung when it comes to making any money. How long all the other Android players can continue without making any profit remains to be seen. Google’s own Motorola is losing money still, and it will be interesting to see what they bring to market this year since they claim that the existing product pipeline is now flushed and so future products should be ones designed after the Google acquisition of Motorola Mobility. It will also be interesting to see if Google keeps the Android playing field level or gives Motorola Mobility something that Samsung doesn’t get its hands on so quickly.

Also worryingly for Google, Samsung has a third operating system Tizen that it is just starting to bring to market. This is the metamorphosis of project Meego that Samsung took over when Nokia dropped it to focus on its Microsoft strategy (how’s that working, by the way?). Since carriers apparently would really like a 3rd ecosystem to keep Apple and Google off-balance, it will almost certainly be successful. For sure Microsoft/Nokia is not that third ecosystem and, while the recently renamed Blackberry (the company used to be called Research In Motion or RIM) has just come out with a brand-new version of their operating system, it seems unlikely to do more than shore them up inside major corporate strongholds such as government and some huge companies.

Tablets are big. So big that many people are predicting that in 2013 tablets will outsell notebooks and desktop PCs. According to Canalys, Apple sold 22.9 million tablets for 49% share, Samsung sold 7.6 million, Amazon sold 4.6 million tablets, and Google’s Nexuses sold 2.6 million. What will happen to the tablet market is going to be interesting. Amazon presumably sells its tablets close to their cost and makes it up on other revenue streams. Apple, which certainly isn’t selling anything like near cost, also has other revenue streams of content. Embarrassingly for Google, Amazon is selling more Android tablets than they are despite Google’s strategy of flooding the market with cheap tablets and making the money on search and other monetization schemes. Amazon is flooding better. Samsung is doing fine for now but could get squeezed since it has a pure hardware business, at least for now.