iPhone Accounts for Nearly 90% of Smartphone Industry Profits in Fourth Quarter

The latest numbers from Strategy Analytics reveal that Apple continued to dominate in global smartphone profit during the fourth quarter of 2014, capturing a record-high 88.7% share of profit during the three-month period ending December. Apple earned quarterly operating profit of $18.8 billion on iPhone sales, up from $11.4 billion during the fourth quarter of 2013.

"Global smartphone operating profit grew 31 percent annually from US$16.2 billion in Q4 2013 to US$21.2 billion in Q4 2014. Android hardware vendors combined took a record-low 11 percent global smartphone profit share, down from 29 percent one year ago. In contrast, Apple iOS captured a record-high 89 percent profit share, up from 71 percent in Q4 2013."

Overshadowed by the success of the iPhone 6 and iPhone 6 Plus, Android suffered a sharp decline in smartphone profit compared to its 29.5% share in the year-ago quarter. Android accounted for a record-low 11.3% share of global profit during the fourth quarter based on $2.4 billion in operating profit. Android had operating profit of $4.8 billion in the year-ago quarter. BlackBerry, Windows Phone and other mobile platforms recorded zero operating profit during the quarter.

These numbers reiterate that the smartphone industry is largely a two-horse race between Apple and Google, whether it be overall platform market share, enterprise market share or smartphone profit share. But if smartphone makers such as Samsung are unable to make decent profits based on the Android ecosystem, Strategy Analytics suggests that vendors may give more attention to alternatives such as Windows, Tizen or Firefox in the future.