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Apple takes two-thirds of the pie in global smartphone profits with only 12% market share, says report

Huawei has shipped 230 million smartphone units so far this year, representing 12% growth from last year’s 206 million.

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It might only have a 12% market share in global smartphone shipments, but US technology giant Apple captured 66% of industry profits and 32% of the overall revenue in the third quarter of 2019, according to a new report from Counterpoint Research.

Samsung and Huawei, the world’s two largest smartphone brands with global market shares of 21% and 18% in the quarter respectively, were the only two brands that increased their revenue on an annual basis, said Counterpoint,

Samsung took 17% of the overall handset industry profits in the period. Counterpoint did not provide specific figures for the remaining major brands, although a chart embedded in its report suggests that Huawei earned about 10% of industry profits in the quarter, Oppo and Vivo earned about 5% each, and Xiaomi was well below 5%.

Although Apple continues to garner the lion’s share of smartphone industry profits, the Cupertino, California-based company has seen its dominance weaken over the years. In the third quarter of 2016 its share of industry profits hit a record 91%, according to research firm Strategy Analytics.

Separately, Android phone makers – especially Chinese brands which used to operate on low-profit margins – have boosted profits by expanding their businesses outside China and moving to high-tier price bands.

In coming quarters the wider adoption of 5G is also expected to drive demand for higher-priced handsets, which in turn will generate revenue growth for original equipment manufacturers (OEMs) like Foxconn, which are already preparing for full 5G commercialization, said Counterpoint analyst Karn Chauhan.

“Huawei, Oppo, Vivo, and Xiaomi will gain from an aggressive 5G push and use this opportunity to increase their average selling prices,” said Chauhan.

Although all major Android-phone makers have launched 5G-enabled handsets in time for the next-generation network, Apple did not offer a 5G-supported iPhone this year. Consumers will have to wait till 2020 at the earliest for an iPhone that can be used with the ultra-fast network.

Huawei has shipped 230 million smartphone units so far this year, representing 12% growth from last year’s 206 million, Huawei’s mobile chief Richard Yu Chengdong said in an internal meeting, according to a Tencent news report on Friday.

Huawei has achieved its yearly target for 2019 and final tally will depend on its performance in December, said Yu, who added that the Chinese brand has outstripped Apple and will retain its position as the world’s second-largest smartphone brand in 2019.

Huawei declined to comment on the Tencent news report.

This article first appeared on the South China Morning Post.