The Dangers of Apple and Samsung Dominance
By the Numbers
According to Walkley, HTC had 3% of the device industry's total fourth quarter profits, Nokia and Research In Motion each had 2% while Motorola and LG both broke even. Apple had 80% while Samsung had 15%.
Do not expect Apple to maintain 80% of profits in the mobile ecosystem on a quarter-by-quarter basis. The blowout by Apple may never be seen again (or, perhaps one quarter a year when a new iPhone is released). The third quarter of 2011 may be more indicative of Apple's place in the ecosystem at 56% of profits. That is dominant but not quite as mind numbing.
Samsung takes up about 40% of the Android ecosystem. HTC is a solid second and Motorola third with LG and Sony Ericsson bringing up the long tail. Samsung also sells Windows Phones (with HTC and Nokia) and its own Bada system (which competes with Nokia's S Series across the world).
The world needs a strong No. 3 in the mobile ecosystem. Ostensibly, that is Nokia with its dominance in emerging markets. Profits do not necessarily come from emerging markets though and Nokia's push to reclaim territory in North America goes to show how important the high-end smartphone market is to the OEMs. Apple has 8.1% of the global mobile market but its profits are 10-times that number.
If Google is determined to launch a cloud-music service, a Pandora acquisition might improve its negotiating position. Wouldn't it be better to be bargaining for cloud rights as the Web's top radio service? Pandora paid $45 million in content
Samsung generally declines to comment, especially on merger and acquisition (M&A) issues. Samsung earlier said it has suffered a sharp fall in its quarterly earnings for the first three months of this year, hit by a weak LCD business and price
