Samsung Topples Apple (AAPL) as Most-Profitable Handset Maker in Q2

July 26, 2013 9:53 AM EDT
When it comes to profits in the mobile device market, Apple (Nasdaq: AAPL) is no longer king.

Strategy Analytics (SA) said today that Samsung overtook Apple as the most profitable handset vendor in Q213. Apple was hit by lagging iPhone 5 sales as well as stiffer competition out of China, SA noted.

For the latest quarter, Samsung garnered $5.2 billion in profits, versus $4.6 billion at Apple. Despite the drop, Apple still retains the second-place position.

Apple's reign as the world's most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013, commented SA's Neil Mawston. Apple's profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.

Apple is down 0.3 percent Friday following a solid run higher earlier in the week.

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