The mobile phone business may soon turn into a conversation between two companies: Apple and Samsung.
The two tech giants accounted for all of the profits in the mobile phone industry during the first quarter of this year, an analyst points out in a new research note, according to Forbes. Apple had 80% of the profits and Samsung provided the rest, Raymond James analyst Tavis McCourt writes.
Apple and Samsung combined had 74% of the mobile handset industry revenues, McCourt notes.
The global handset industry also had its “weakest performance in history,” apart from the recessions of 2001/2002 and 2009, with volumes declining year-over-year, McCourt writes.
He adds that revenues from non-Apple companies are down year-over-year and pre-tax margins are at multi-year lows.
With these industry-wide struggles, McCourt writes, “It’s getting increasingly hard to understand where the rest of the device vendors will get the capital to fund necessary R&D and sales and marketing investments to continue to compete with Apple and Samsung.”
Furthermore, he wonders which companies, apart from Samsung, Google and Microsoft will be able partner with on their Android and Windows phones.
“Neither wants to be in a position where they have to take on more of the R&D burden, and neither want to have to initiated bidding wars to give Samsung an incentive to focus on its platform,” McCourt writes. “Our assumption is that both Huaweii and ZTE will be courted heavily over the next few quarters by both Microsoft and Google as they look to strengthen their stable of sustainable hardware partners.