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AAPL and Samsung – The ONLY Profitable Smartphone Plays

Apple (AAPL) and Samsung (SSNLF) are far and away the leaders in mobile hardware, with their iPhone and Galaxy smartphone lines, respectively.

aapl stock appleBut AAPL and Samsung are also far and away the leaders in mobile profits, too.

A recent report indicates that Apple tallied 87.4% of all mobile phone profits in Q4, according to a Raymond James analyst, while Samsung booked 32.2% of mobile phone profits.

That’s literally every penny of profit in the entire mobile phone space — and then some — between the two smartphone giants.

And if you’re curious how the combined share of profits tallies about 120%, the answer lies in the fact that many competitors like BlackBerry (BBRY) and Google (GOOG) have been selling their phones at a significant loss and inflating figures.

What’s more, the landscape doesn’t appear to be changing anytime soon. BlackBerry just gave up on its consumer-focused mobile biz and GOOG just sold its Motorola unit to Lenovo (LNVGF) after failing to turn a profit on homegrown hardware.

While Google and its Android OS still have a foothold in the mobile market via software and apps, the bottom line is that AAPL and Samsung are dominant when it comes to the actual profits generated from gadgets.

So if you’re looking at playing mobile, remember this trend. Apple and Samsung are the only companies really making money off hardware in the U.S.

Of course, it’s worth noting that now the rate of growth in the mobile space is slowing as the Western markets get saturated. As a recent Investor’s Business Daily article puts it, “After four straight years of double-digit growth, the mobile phone market has hit a wall. Excluding Chinese vendors, the industry is likely to see little or no revenue growth this year…”

So while AAPL and Samsung are dominant, their success isn’t guaranteed.

Their hardware competitors, on the other hand, are pretty much a sure thing when it comes to lagging in smartphone profits in 2014, however.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at or follow him on Twitter via @JeffReevesIP

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