The explosive woes of Samsung’s defective Galaxy Note 7 franchise have helped catapult China’s Huawei past the South Korean conglomerate as the most profitable Android smartphone manufacturer in the world. Apple (AAPL) continues to remain the most profitable of all smartphone makers with a staggering 91% operating profit market share.
Huawei, meanwhile, controlled 2.4% of the global smartphone operating profit share ($200 million) in the third quarter of 2016, and two other Chinese companies—Vivo and Oppo Electronics—gained to 2.2% market share each in the crowded Android field, according to the South China Morning Post.
“[Huawei] also became the world’s most profitable Android smartphone vendor for the first time,” Strategy Analytics executive director Neil Mawston told the Post in an interview. “We expect Huawei to maintain steady profitability into the first half of 2017, because its smartphone shipments are growing and it is doing a good job of controlling [operating] costs.”
Still, Huawei’s gains against Samsung may be short-lived. While the device maker has benefited from savings and revenue growth through its decision to start manufacturing in India, Samsung was knocked down to ninth place in the third quarter largely due to its defective line of exploding Galaxy Note 7s, which the firm stopped manufacturing entirely. But the imbroglio hasn’t hurt Samsung’s overall brand so far, according to a Reuters/Ipsos opinion survey from earlier this month.
That means that Samsung can easily bounce back in the coming months and year with the launch of a new flagship product. But privately-held Huawei still aims to be the second biggest player in the smartphone arena behind Apple within two years, says the company’s consumer business CEO Richard Yu Chengdong.
