Apple 2.0

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Pie chart of the day: Apple's share of smartphone profits

December 11, 2012: 10:07 AM ET

"Apple and Samsung are the only investable smartphone brands" -- Citi Research

Source: CitiGroup

Top 8 smartphone OEMs. 2012 profit pool is 70% Apple and 30% Samsung. All others losing money. Source: Citi

FORTUNE -- Things look grim for everybody but Apple (AAPL) and Samsung in the profitable segment of the smartphone market, according to a note to clients issued Tuesday by a team from Citi Research. The pie chart above and the paragraph below say it all:

Smartphone Market Faces Dramatic Structural Changes - At the high end (US$500+), Apple and Samsung continue to dominate. At the lower end, internet/software companies will lead in US$200-300 phones and Chinese brand and whitebox players will annex the sub-US$200 segment many with a zero hardware profit model. Given the rising competition, we expect many traditional mid priced US$200-500 smartphones to be wiped out in the next few years, leaving little future for companies that lack high-end exposure.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for

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