Huawei beats Samsung for second place, Apple still number 1

As if it wasn’t bad enough that Samsung was always playing catch-up to Apple in the Smartphone profit race, lady luck decided to move further away from the South Korean technology mammoth. 2016 just won’t let up for Samsung, when the company just suffered from the most damaging manufacturing disaster in smartphone history. Just as Samsung’s Note 7 turned into a spontaneous explosive device, this quarter rolled in some more bad news. According to recent numbers given in a report by Strategy Analytics, Huawei Technologies has overtaken Samsung to take second place in the list of most profitable smartphone supplier in the world. The third quarter of 2016 that ended on September 30, Huawei is followed by the two other Chinese brands that were always at its heels - Vivo and Oppo. Seems like people were feeling far more keen on using their content transfer app like SmartIO on Huawei, Vivo and Oppo, than Samsung this quarter.

The report details that in the Q3 of 2016, Huawei generated $200 million of smartphone operating profit (which is the company’s earnings before interest and taxes are deducted. This number, however, is stil just a drop in the ocean; it totals to 2.4 percent share of the global smartphone operating profits. Both Vivo and Oppo have 2.2 percent shares.

The top spot, as usual, belongs to Apple, which made a profit of $8.5 billion, which equated to 91 percent of the total smartphone profits made in the third quarter. The total profit reported by Strategy Analytics was $9.4 billion operating profit. The report also suggested a major decline in the total profits estimated, perhaps due to the global economic downturn, or possibly due to lack of penetration in previously-unchartered markets. In the same quarter for 2015, total profits were reported to be $13.5 billion.

The report states that the shift in positions was mainly because in addition to improving their smartphone models, Huawei, Vivo and OPPO also improved the functionalities offered on the devices and kept the distribution costs under check.

Linda Sui, from Strategy Analytics went on to add that Huawei has shown impressive results by demonstrating major improvements in its supply chain, showcasing contemporary product designs and employing  effective marketing strategies. She added that Vivo and Oppo should credit their rise to strategic pricing and increased demand in Asian markets.

While all three companies have shown great progress, one thing that remains most impressive is Apple’s clear lead. It seems like the rest of the companies put together can’t compete Apple’s brand value, reflected in its pricing and production cost. While Apple devices are not as widely used as Android devices, its price more than makes up for it.