According to the latest research from our Wireless Smartphone Strategies (WSS) service, global Android smartphone profits reached US$5 billion in total during the first quarter of 2013. Samsung dominated and captured an impressive 95 percent share of all Android smartphone profits.

We estimate the global Android smartphone industry generated total operating profits of US$5.3 billion during Q1 2013. The Android platform accounted for 43 percent share of the entire smartphone industry’s operating profits, which reached US$12.5 billion worldwide in the first quarter of this year.

We estimate Samsung’s Android smartphone shipments generated US$5.1 billion of operating profit worldwide in Q1 2013. Samsung captured a huge 95 percent share of all Android smartphone industry profits. An efficient supply chain, sleek products and crisp marketing have been among the main drivers of Samsung’s impressive profitability. LG followed in second place and took 3 percent global profit share. LG delivered a small profit during the quarter, but it currently lacks the volume scale needed to match Samsung’s outsized profits.

Samsung is, for now, the undisputed king of the global Android smartphone industry. We believe Samsung generates more revenue and profit from the Android platform than Google does. Samsung has strong market power and it may use this position to influence the future direction of the Android ecosystem. For example, Samsung could request first or exclusive updates of new software from Android before rival hardware vendors.

Exhibit 1: Global Android Smartphone Profit Share in Q1 2013 [1]

Global ANDROID Smartphone Profit by Vendor : Q1 2013

Operating Profit (US$, Billions)

Profit Share %

Samsung

$5.1

94.7%

LG

$0.1

2.5%

Others

$0.1

2.7%

Total

$5.3

100.0%

 


[1]  Numbers are rounded. The data-table includes Android smartphone hardware profit only. It does NOT include any other operating systems. The data-table does NOT include tablets or any other devices. Profit is defined as operating profit.