My Photo

Ordering Information

Tomi on Twitter is @tomiahonen

  • Follow Tomi on Twitter as @tomiahonen
    Follow Tomi's Twitterfloods on all matters mobile, tech and media. Tomi has over 8,000 followers and was rated by Forbes as the most influential writer on mobile related topics

Book Tomi T Ahonen to Speak at Your Event

  • Contact Tomi T Ahonen for Speaking and Consulting Events
    Please write email to tomi (at) tomiahonen (dot) com and indicate "Speaking Event" or "Consulting Work" or "Expert Witness" or whatever type of work you would like to offer. Tomi works regularly on all continents

Tomi on Video including his TED Talk

  • Tomi on Video including his TED Talk
    See Tomi on video from several recent keynote presentations and interviews, including his TED Talk in Hong Kong about Augmented Reality as the 8th Mass Media


Blog powered by Typepad

« Emerging World Stories in Mobile, these should cheer you up | Main | Big Bloated Billions Blog - The Preview to Mobile Stats in Year 2012 (plus freebie gift) »

April 27, 2012



What does the world's biggest mean exactly? Samsung sells the most units, yes, but Apple crushes Samsung in phone revenues and makes roughly 70%-80% of the entire mobile industry profits.

I think that "biggest" has multiple characteristics. Samsung makes the biggest number of handsets, Apple makes the biggest amount of revenue and profits.

The new decade is certainly not poised to become the Samsung decade, when you look at revenues.


No Apple get majority of the profit because operators subsidize iPhones heavily - bey they are getting fed up with it.

Whenever there will be a real 2rd rival handset (beside Galaxies) available - being able to compete directly with iPhones - operators will lower their $$$ support for iPhones and it will immediately shrink profit of Apple...

They cannot do it now because it would lift Samsung into similar position where Apple sits now. But if there is two challenger none of them can feel itself in safe haven thus 'negotiation power' of operators increases immediately and they can play their cards more efficiently...

Hopefully that 'new challenger' phone(s) will be made be Nokia very soon otherwise... :-(


samsung did not report how many handsets or smartphones it sold. They could be just pretending to sell more handsets than nokia or apple


@zlutor comes to us with the deep insight that if things were different, they would be different. if there was another phone that was so popular it could get people to switch carriers and sign a long contract, the company making it could ask more money from the carrier. Nobody ever thought of that. Somebody make this guy the CEO of a phone maker!


Tome: As Samsung does not report actual smartphone sales, can you provide some insight on how the numbers were derived? Thanks.

Tomi T Ahonen

Hi Vikram, zlutor and doubtful

Vikram - the measure of who is biggest is the same measure as in any industry, the number of units sold. That is how car manufacturers are measures, that is how airplane manufacturers are measured, that is how TV makers and videogame consoles and soft drink makers like Coca Cola etc. The number of units is who is biggest, not who makes the most money. That is a financial industry measure and may be interesting to some investors, but is not the focus of this blog, which deals with the digital converging industry, where the installed base means potential customers. It doesn't matter if you own a 50,000 dollar Vertu or a 50 dollar Mi-Fone, in either case you are a single mobile phone owner.

zlutor - ok, thanks. I am sure that makes sense to you, but in reality, the vast majority of mobile phones are sold without subsidy. Even of Apple's iPhone sales, about a fifth now sell in markets where there are no subsidies like in Italy or Belgium or Israel or South Korea or here in Hong Kong, or where subsidies are only a minor part of the industry. The subsidy has nothing to do with Apple's profit, it is only a marketing gimmick and market distortion. The whole industry is moving away from subsidies (gradually) as they distort the market. Handsets today are cheap enough that we don't need subsidies. We don't get subsidies for far more expensive consumer electronics purchases like plasma screen TVs.

doubtful - Samsung did not give the total handset sales number that is true. Samsung CEO did however explicitly quote the smartphone number at 44.5 million so that is definitely from Samsung. Two analyst houses, Strategy Analytics and iSupply have already released Samsung numbers ahead of Nokia on the total handsets, and Nokia's own Chairman, former CEO Jorma Ollila admitted this Wednesday that Samsung has passed Nokia during Q1, Nokia internal numbers clearly show the same fact. You don't need to believe it. I have seen enough evidence, including totally consistent regional reports from Australia to India to USA to Europe to Middle East and even Africa. Samsung is on the rise. I do believe it.

Thank you all for writing

Tomi Ahonen :-)

Tomi T Ahonen

Hi Louis and darwinphish

Samsung Chairman Lee Kun-Hee said Samsung has sold 20,000 Samsung Galaxy smartphones per hour for the past quarter. That means a minimum of 43.2M smartphones sold even if Samsung sold zero bada smartphones and zero Windows Phone smartphones. Samsung is vastly bigger than Apple in Q1. Officially from the Chairman's mouth. Happy?

Tomi Ahonen :-)



Hi Tomi,

Could you please clarify this "subsidy not driving Apple's profitability" issue? As we have seen recently (AT&T, Verizon) the Operators indeed wish to get rid of subsidies. Say they do, so wouldn't this have a very direct effect on Apple's profits? Not in terms of ASP's only, but in terms of market share too.

I tend to think that even though iPhone volumes in US marginally grew YoY in 1Q12, the decline from 4Q11 was so big that there indeed is something cooking and Apple better think about this.

It's been said (by AT&T?) that iPhone subsidy is as big as 400 USD. Add that to the price tag and consumer will take a look at the alternatives.


@tomi: I certainly don't doubt that Sammy is a LOT bigger in unit volume than Apple. In fact, the people who say things like "that's only the number SHIPPED" strike me as crazy. This distinction makes sense only when the product is niche, like Android tablets or the Galaxy Note, or the company is about to completely fail when the channel fills.

Since I live outside the US, I also am aware the subsidy isn't actually a subsidy in any technical sense: users pay more on contract in any competitive. (The US is unique this way, in that the two decent carriers charge you the same whether you are on a contract or not.)

As for the long-term, who knows? Apple's share is higher in smartphone saturated markets, which where things are going.


@Louis: "if there was another phone that was so popular it could get people to switch carriers and sign a long contract, the company making it could ask more money from the carrier" - definitely NO, I think you misunderstood me.

I meant it other way around: if there were two(!) additional devices (from separate vendors) being popular enough to compete with Apple's product _operators_ would not subsidize iPhones such level as they are enforced to do so.

So, not the 'other phone maker(s)' would get more but all vendors - and especially Apple - would get significantly _less_ from the operators - eroding heavily the profit of Apple.

"Somebody make this guy the CEO of a phone maker!" - no thanks! :-) On the other hand if Elop can still be CEO of Nokia... :-)

@Tomi: "Even of Apple's iPhone sales, about a fifth now sell in markets where there are no subsidies " - is it so that majority of iPhones are sold for ~500$-600$ directly paid by the consumers worldwide?

I've thought majority of them is sold with some contract worldwide, too. I've thought subsidization level in general is not so heavy as it is in the USA but still. But, you are the expert, so I have to accept your words. :-)


@CN: Here is another way to look at things. Do you think that VZ and AT&T can raise the price of their smartphone plans $20/mo and not lose users without colluding?

In a competitive market, a gigabyte of data is €5 and most calls are 9c/min. Everything else the US carriers are collecting is profit/handset financing charge.


Apple's profits last quarter were $11.8 billion, of which about half came from mobile. Samsung's profits were $5.2 billion, of which about half came from mobile. What that indicates to me is that even if the carriers attempt to reduce subsidies, Apple has a lot of margin that it could afford to give while still earning more than Samsung (on about 70% of Samsung's smartphone volume and 0% of its feature phone volume). I wouldn't be surprised if Samsung earns more on sales to Apple of smartphone chips and NAND than it does on its feature phone volume.


@Louis: NO, consumer will not pay more - mainly because of the competition of network operators.

But operators want to pay _a lot_ less for the phone makers. That is why they want to have (at least) three(!) competing devices made by three different vendors. It would immediately boost their negotiation power.

If Apple was still recommend such high subsidization they would push the other device(s) for a while. But they can not do it until there is o huge customer demands for the iPhones. Alternative, alternative - it is their wish...


@zlutor: I am sorry, but this is just wrong. The market clearing price of an iPhone is what it is. I really do encourage you to go and separately compute the price of using an iPhone from Apple plus the cost of service (which may be found at and respectively) and then the similar price with a contract. You are arguing the 2nd number is somehow a lot lower. Check!


It's incredible they began some 60 years ago with producing noodles, and now, they lead Mobile industry, are a major player in : TV, sound, cameras, video, printers, microwave ovens, hard disks, electronic components, shipbuilding, washing machines, and many others (the list is very long)

I don't know where is their secret to success, but... well done!


@Louis: "You are arguing the 2nd number is somehow a lot lower" - NO! Usually the 2nd one is much more since it includes fee of some operator provided services.

What I say is when an operator sells an iPhone it pays Apple a lot of money - because of if they do not sell 'cheap' iPhones, no customers. Sometimes they pay money just for Apple letting them to sell iPhones at all - see Sprint in USA:

The _initial_ price a customer sees in the shops of any operator contains more or less discount for all phones (compensated with the service fees in long rune for the operators). See Lumia900 in the USA - people buys it(?) because it is cheap enough not because it is superb enough...

In case of an iPhone this discount is HUGE nowadays and it is paid by the operators (especially in the USA). Yes, later the phone costs more with contract but people seem to be not taking care of it but the initial price. Here in Hungary an iPhone 4S 65GB cost ~900 EUR without contract at Apple's online shop (

At T-Mobile, with two years contract, the initial cost is ~174EUR. The rest is paid by the operator, I guess... :-)

Operators want to get rid of/reduce that cost. But without having competing products - more than one! - they can not do that...

Three competing vendor is the minimum from operators point of view - one at the top, one challenger and one being challenger of the challenger. In the ideal world of the operator - and any customer - the roles are rotating between them... ;-)


@vladkr: yes, they are like Siemens in Europe - or even more. Samsung produces almost everything being more complex than an axe... :-)

What is the secret? Maybe hard work, determination and a huge-huge-huge conglomerate when the members help each other when somebody is in trouble for a while...


On a business trip to Samsung headquarters, I recall being driven in a Samsung car past the Samsung apartments that were being built by Samsung heavy machinery!

I think Apple is still pretty happy with their place in the mobile space, epic profit margins on handsets and still crushing everyone in the tablet space.


@zlutor: "The rest is paid by the operator, I guess... :-)"

No, it's in the contract price. This is the mistake you keep making.


Did Samsung's CEO actually say 44.5 million? Was it in the analyst call? If so, then why not put that in the press release? There seem to be some conflicting reports, with another analyst claiming that they sold 32 million smartphones

That's a bit of a disparity. If it is indeed 32 million, that suggests that most of the sales declines represent normal cyclical activity, and that Apple's quarter was even better than originally thought (and not the near-disaster that Tomi's Wednesday post made it out to be).

The comments to this entry are closed.

Available for Consulting and Speakerships

  • Available for Consulting & Speaking
    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

Tomi's eBooks on Mobile Pearls

  • Pearls Vol 1: Mobile Advertising
    Tomi's first eBook is 171 pages with 50 case studies of real cases of mobile advertising and marketing in 19 countries on four continents. See this link for the only place where you can order the eBook for download

Tomi Ahonen Almanac 2009

  • Tomi Ahonen Almanac 2009
    A comprehensive statistical review of the total mobile industry, in 171 pages, has 70 tables and charts, and fits on your smartphone to carry in your pocket every day.

Alan's Third Book: No Straight Lines

Tomi's Fave Twitterati