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Comment by forkLding | Hacker News Reader

Signals to the end of an era, smartphones have matured and are becoming ubiquitous like laptops. Moreover, the most profitable smartphones belong to Apple which held 86% of smartphone profits generated in the industry in 2018. Samsung was competing more in the mid to affordable segments so it was bound to start losing once others started catching up, especially since its Chinese competitors are basically giving up profits for growth in the affordable to medium segments.

https://appleinsider.com/articles/18/04/17/apple-grabs-86-of...

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Convenient narrative, but it's likely that this has more to do with their component business (nand, DRAM, LCDs, etc.) than their smartphone business. Samsung overproduced a bunch of memory just as demand fell through the floor. [1]

Also, your article on Apple's smartphone profit share is from April 2018, so more like 2017 than 2018. Not sure how relevant that is to 2019 earnings.

[1] https://www.wsj.com/articles/samsung-hopes-strong-chip-sales...

What about the fact that the Chinese manufacturers are taking over the Asian and European market, over Samsung and Apple who are both losing market share? They might not be making as much money, as they run much tighter profit markets, but they are basically taking over the market by undercutting the competition.

I think that narrative is roughly correct, but I think it doesn't affect profit of neither Samsung nor Apple in the short term. Who knows about long term.

What about it? I'm sure that could also be affecting their earnings, we'll have to wait for the earnings report to find out the extent of it. But the current analysis and reporting right now points to major issues in the component side of the business.

Also, remember that Samsung is still selling these components to Huawei, Oppo, etc., so it's not a total loss when they take market share.

On the other hand, Samsung's smartphone market share is pretty important for its nascent non-memory component business, because Huawei won't use Exynos, neither AP nor 4G and 5G modem.

>On the other hand, Samsung's smartphone market share is pretty important for its nascent non-memory component business, ...

not sure why that matters? the nascent non-memory component business is not the major cost-center, or money-maker for the company. Samsung's doesn't always use internal parts in their products -- take for instance, Sharp, which had been Samsung's LCD panel supplier until Foxconn took over. There are also rumors that some lower end Samsung smartphone use displays made by BOE.

>What about the fact that the Chinese manufacturers are taking over the Asian and European market

Two independent industries. Those Chinese manufacturers still have to use memory products made by either Samsung, Hynix or Micron. It does not matter which smartphone OEMs make more profit or has greater marketshare. Those three DRAM makers combined account for 90% of global DRAM supplies. China is not going to have its own domestic (major) DRAM manufacturer anytime soon.

Absolutely I agree that AppleInsider's nonsensical fanboi narrative has no place.

This is all part of business cycle that went a bit berserk in 2016 when Samsung decided to increase their capex significantly to boost their capacity to capture greater marketshare in spite of the obvious resulting glut. Yes, consumers benefitted from plummeting prices, but most DRAM makers had to cut capex and capacity to deal with the DRAM glut and plummeting prices in 2016. The lower capex and capacity likewise eventually led to the price hike of 2017-2018 that we just witnessed. During this rise, the DRAM market participants again started expanding and we are seeing prices falling again. Barring unseen major technical breakthrough or extraordinary market demand (no, I don't mean Apple's market share or profit margin, fanbois), this cycle would continue...

> Samsung was competing more in the mid to affordable

I assumed Samsung’s android phones were the top of the range. Who do you think is the high end android phone brand

Just comparing smartphones in general, not really Android vs IOS. Samsung was probably the top-range Android phones in terms of pricing.

That the best android phone is at best a midrange smart phone. Is an interesting and very unlikely to be a broadly shared opinion

They make high end phones, but their sales volume doesn't make up for the margins. In terms of manufactured phone volume, the Galaxy line makes up a tiny fraction of their total sales.

I feel like the vast majority of the Android ecosystem foot gunned itself pushing its way out of reasonably priced device segments. There really are no modern equivalents to the Moto G or Nexus 5 or even early One Plus phones in the $150-$350 range. Its garbage up through $200, then a giant gap to $1000 phones.

Especially in the tablet segment. I can get why Google didn't want to try to single-handedly prop up the form factor with first party devices, but the last good (and reasonably priced) Android tablets remain the second generation Nexus 7 and Nvidia Shield from half a decade ago.

There is always a reasonably priced model. Right now it is xiaomi poco phones.

Nokia does what you want. See eg https://arstechnica.com/gadgets/2019/02/guidemaster-the-best...

I wish Nokia would release a cheap phone with an AMOLED screen, eg, like the Oneplus X 4 years ago...

Until there's another sub 300$ phone with an AMOLED upgrading seems pointless.

Nokia, OnePlus, Xiaomi, Huawei, in order of hardware + software combo. Nokia had slightly less interesting hardware but runs stock Android (= good update policy).

Yes, but their high end makes the majority of the profits. Which is what we are talking about here.

The Moto G series are still good phones in the <$350 range

Im curious if people find Samsung products top of the line. I thought they were a big advertiser similar to Apple, selling low to mid range products at heavy markups.

My S5 was awful with multiple bugs, quickly dead samsung SSD, my grandfathers smart TV was slow despite being bought in 2018, and horror stories about Samsung appliances.

"Apple which held 86% of smartphone profits"

"Chinese competitors are basically giving up profits for growth"

It interesting how Apple have managed to capture so much of the profit in the industry, and consumers are willing to go with them rather than one of their essentially subsidised rivals.

I wonder how long this situation can continue for, some kind of reversion to the mean has to happen eventually.

Laptops aren't ubiquitous.

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