Samsung overtakes Apple as 'most profitable phone firm'

A woman in a shop in Paris looks at mobile phone accessories
Image caption The mobile phone sector is enjoying strong growth

Samsung has become the most profitable mobile phone company in the world, overtaking Apple, a report says.

Samsung's handset division had an estimated operating profit of $5.2bn (£3.4bn) in the second quarter of 2013, according to Strategy Analytics.

Apple's iPhone operating profit was estimated at $4.6bn, with the iPhone range "underperforming".

Total mobile phone shipments were 386 million in the April-to-June period, 4% up on the same time last year.

In all, 27.7% of phones shipped were made by Samsung. Separately, Samsung, which is also the world's biggest TV maker, reported second-quarter profits of $7bn for the entire company.

"This was the mobile phone industry's fastest growth rate since the second quarter of 2012," said Neil Shah, senior analyst at Strategy Analytics.

"Strong demand for entry-level Android devices in Asia and Latin America drove much of the growth. Samsung continued to dominate, shipping 107 million mobile phones worldwide."

At the same time, global smartphone shipments hit 230 million in the quarter, 47% higher than in the same period of 2012. Of those, 33.1% were manufactured by Samsung.

However, Apple's share of the smartphone market, at 14%, was its smallest for three years.

"The current iPhone portfolio is underperforming and Apple is at risk of being trapped in a pincer movement between rival 3-inch Android models at the low-end and 5-inch Android models at the high-end," said Neil Mawston, the research firm's executive director.

He added that Apple's profit margin on handsets had been fading because of "lacklustre" sales for the iPhone 5 and tougher competition from rivals.

"With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor."

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