Even with 40% fewer unit sales, the iPhone is 3 times more profitable than the Galaxy S
Source: Strategy Analytics
Apple's (AAPL) reign as the world's No. 1 maker of smartphones, it turns out, was like the life of a grasshopper: It overtook Nokia (NOK) in June and was overtaken by Samsung in September.
Samsung reported Friday that it sold 27.8 million Galaxy smartphones last quarter, easily outpacing the iPhone's 17.07 million. Even if Apple sells 25 to 30 million iPhones in the holiday quarter, as various analysts predict, Samsung is likely to retain its lead.
But unlike the grasshopper, Apple is in it for the long run. It's selling iPhones as fast as it can make them and socking away more profit than all of its competitors combined (see here).
Samsung, for example, reported profits of $2.2 billion from the sales of Galaxy smartphones last quarter, 60% of the electronic giant's total.
iPhone sales last quarter, while less than expected, generated nearly $11 billion in sales (39% 0f Apple's total). Assuming, conservatively, 60% profit margins on each iPhone sold, that's an estimated profit of $6.5 billion, leaving No. 1 Samsung in the dust.
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