Apple has lost its status as the world's most profitable maker of mobile phones, with strong demand for Samsung's Galaxy handsets pushing the South Korean multinational into the lead for the first time.
While the high-priced iPhone was the engine that propelled Apple to become the world's most valuable company, its customers are no longer bent on owning the latest model.
Healthy demand for the three-year-old iPhone 4, which is cheaper than the latest iPhone 5, has reduced the average selling price of its blockbuster device.
As smartphone ownership trickles down the income brackets in western and emerging markets, Apple's margins have taken a hit. The company's latest financial results showed that the average selling price of an iPhone has fallen to
The same trend has squeezed Samsung's handset profits, which are down from an estimated
"With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor," said Neil Mawston at Strategy Analytics.
"Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013."
Rather than producing new budget phones, Apple has relied on sales of its older models to reach the more cost-conscious shoppers. But a change of strategy is rumoured: the chief executive,
Across all brands around the world, the average price of a smartphone has plunged to
The trend has helped Samsung widen its lead over Apple in the overall volume of handsets sold. Apple's global smartphone market share has fallen from 17% to 14%, its lowest level for three years, while Samsung's edged up to 33%, Strategy Analytics' research shows.
Samsung sold 76m smartphones in the quarter to June, more than twice Apple's 31m iPhones, and up from 49m in the same period a year ago. LG, ZTE and
Samsung's top-seller, the Galaxy S4
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