Apple raked in 94% of smartphone industry's profits in Q3, analyst estimates

Apple (NASDAQ: AAPL) may have missed slightly Wall Street analysts' expectations for iPhone sales in the third quarter and may still account for a small minority of smartphone sales worldwide, but it is still the king when it comes to another important metric: smartphone profits.

According to a new report from Canaccord Genuity analyst Michael Walkley, Apple gobbled up 94 percent of smartphone industry profits in the third quarter, despite making up only 14.5 percent of smartphone unit sales. (According to research firm Strategy Analytics, Apple had 13.6 percent global smartphone market share in the third quarter.)

The fact that Apple led the way in smartphone profits is nothing new. According to Walkley, the third quarter was the fourth straight quarter that Apple likely captured more than 90 percent of the smartphone industry's overall profits. What is news is that so few others can turn a profit, as the likes of BlackBerry (NASDAQ:BBRY), HTC, Lenovo, LG Electronics, Microsoft (NASDAQ: MSFT) and Sony continue to struggle. The report did not include data on Huawei, the world's No. 3 smartphone maker, because Huawei is privately held.

The only other smartphone maker to post a profit in the third quarter was Samsung, which led the market in sales and captured 11 percent of the industry's total profits. Apple and Samsung technically made up 105 percent of industry profits because all the other major vendors posted losses.

Apple raked in $17.78 billion in smartphone operating income in the third quarter while Samsung netted $2.08 billion, according to Canaccord. Together, the two had $19.86 billion in smartphone profits, the report said.

Despite concerns that a slowing economy in China could cut into Apple's sales, Walkley thinks the company has a bright future ahead of it heading into next year. "Apple dominated the premium-tier global smartphone market during calendar Q3, with record share of industry profits," Walkley said in the report. "We believe the iPhone 6 and 6s products should continue to post strong sales and high-end smartphone market share gains.

"With only 31% of the iPhone installed base having upgraded to the iPhone 6 and 6 Plus devices by Apple's fiscal Q4 2015 (ended Sept. 26), we anticipate continued strong replacement sales through calendar 2016 and beyond," he added.

For more:
- see this Investor's Business Daily article
- see this Forbes article
- see this Business Insider article
- see this 9to5 Mac article

Related articles:
Analysts: Samsung returned to smartphone growth in Q3, but overall market is slowing down
Apple sells 48M iPhones, just below Wall Street expectations
Apple likely to best last year's iPhone sales this quarter, but all eyes are on holiday period
Microsoft sees phone revenue decline by 54% in Q3 ahead of new Lumia launches
Apple gobbles 92% of smartphone industry's profits, analyst estimates

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