SEOUL, KOREA - Samsung Electronics and Apple grabbed 95 percent of the world’s mobile phone profits, indicating that they are virtually monopolizing the global mobile phone market. According to a Hong Kong-based market research firm CPR, Apple captured 70 percent of the global mobile phone market’s profits, while Samsung Electronics grabbed 25 percent.
Following them were Nokia with 2 percent and the remaining 3 percent were captured by 300 smartphone makers worldwide. Apple lagged behind Samsung Electronics in terms of sales volume but its profits were more than three times higher than those of Samsung Electronics.
Key factors behind Apple’s higher profits include the fact that Apple’s average sales price (ASP) is high but production cost is low.
Unlike Samsung Electronics which releases a variety of models, Apple produces a single model (iPhone) which contributes to reducing the cost of parts and components. Moreover, Apple also cut production cost by actively using outsourcing, including those to Foxconn.
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*Article provided by The Korea Economic Daily
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