Global mobile handset profit pool declined 10% YoY in Q2 2017: Counterpoint

According to the new report by research firm Counterpoint, the global mobile handset profit pool declined 10 percent YoY during Q2 2017 and the reason the main reasons were, an increase in the mix of cheaper iPhone models, growth of less profitable mid-tier models in prepaid markets from vendors like Xiaomi as well as sales mix shift for Samsung to mid-tier J and Grand series portfolio.

However, Apple dominated the global profit share, holding 65 percent of the pie with just 9 percent of the total handset shipments during Q2 2017.

"We estimate that the Apple iPhone X will further increase profits for the iPhone maker in the premium segment and overall to record levels," report said.

The average selling price for iPhones in developed regions is approximately 150 percent higher as compared to the regional industry ASP whereas in developing regions it can go as high as 650 percent compared to the overall industry ASP in that region.

This underlines the huge global price differential the iPhones have with respect to competitors and "premium brand equity" it tries to cash in on, it added.

Meanwhile, Samsung has regained profitability and reputation over the past few quarters, after the Note 7 debacle with the help of its new Galaxy S8 series flagship.

The Galaxy S8 and S8 Plus are gaining attention amongst users with their Infinity display, beautiful design, and virtual assistant Bixby. However, the major shift in sales towards mid-tier models has caused Samsung's profits to decline almost 30 percent YoY.

The profit of Huawei, OPPO & Vivo combined crossed a billion-dollar mark growing a healthy 43 percent YoY during the quarter. The Chinese brands are growing fast when compared to industry leaders due to their high-quality offerings at competitive prices with attractive designs and innovative features. Aggressive marketing campaigns and strong promotions have helped them further.

The report pointed out that, Asian region has been the linchpin for the growth for this trio, however, expanding beyond Asia markets will definitely put significant pressure on their operating margins in near- to mid-term