Samsung Captures Virtually All the Profit in Android Market

Telecom & Wireless

Published: May 15, 2013 11:35 am

Last Updated: April 28, 2020 4:22 am

Source: courtesy of Samsung

To say that Samsung Electronics dominates the market for smartphones using the Android operating system from Google Inc. (NASDAQ: GOOG) is an understatement. The Korean electronics giant reaps 95% of the profit in the Android market, not far behind the 100% profit that Apple Inc. (NASDAQ: AAPL) hauls in from its proprietary iPhones and iOS market.

The data comes from the latest research by Strategy Analytics and reflects profits generated in the first quarter of 2013. Of profit totaling $5.3 billion, Samsung takes an estimated $5.1 billion, with LG Electronics capturing about $100 million and the rest divided among all other Android phone makers.

Not only does Samsung beat every other smartphone maker in taking profit from Android, Strategy Analytics’ executive director notes an even more glaring note:

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.

Google’s Motorola division is among the also-rans in the profit-taking from Android, but it is unknown how much Google benefits from its control of the advertising network that feeds the Android ecosystem. Google’s gross profit last quarter topped $8 billion, but how much can be attributed to Android is not broken out by the company. Whatever the total, it is certainly not more than $5.1 billion.

Google kicks off its developers’ conference I/O today, and the company is expected to introduce a new streaming music service that could challenge both Apple’s iTunes and Internet radio provider Pandora Media Inc. (NYSE: P). Investors are upbeat, sending the stock above $900 a share for the first time and to a new all-time high of $911.76.

What is amusing to ponder is how much Google could have profited from Android if it had charged smartphone makers even a modest licensing fee.

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