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Samsung’s Android success story

If you judge success by column inches, then you might be mistaken in believing that Apple is the king when it comes to smartphones. But Asymco’s Horace Dediu posts information which shows that Korean firm Samsung has leveraged Android to come from nowhere to grab a commanding portion of the smartphone market.

Samsung’s success has been little short of stellar. The company went from almost zero smartphone sales to quarterly sales of over 50 million units in two years, dwarfing the competition, including Apple.

In percentage terms, this is a unit sales growth from 3 percent during the first quarter of 2010, to 54 percent during the third quarter of this year.

Other metrics are also incredibly healthy, with the average selling price of a handset increasing from $115 in 2007, to $234 today, with a corresponding increase in operating margins from 12 percent to 21 percent.

Samsung’s operating margins are now second only to Apple.

The Korean smartphone giant is even outpacing Google, the company behind the Android operating system. Samsung’s operating income from mobile clearly exceeds that of Google’s income from all operations.

Dediu closes by asks some key questions about Samsung’s future.

“Why aren’t there other vendors successful with Android? Why isn’t Google successful with Android? Why isn’t Google’s Motorola successful with Android? What would happen if Samsung soaks up so much profit from mobile that it’s in a position to acquire Google and control the trajectory of their enabling platform?”

Samsung has seen a great deal of success with its Galaxy series of devices. Sales of the Samsung Galaxy S III have been strong, hitting 20 million in 100 days, and then 30 million in less than six months. According to market research firm Strategy Analytics, Samsung sold 18 million Galaxy S III handsets during the third quarter, compared to only 16.2 million for Apple’s iPhone 4S, ousting Apple from the top spot.

The Galaxy S III also saw a broad release, available on Verizon, ATT, Sprint, T-Mobile and U.S. Cellular. This made it available to as broad an audience as possible. Availability matters, whereas Apple tends to pick and choose carriers. 

The Galaxy S III is also a great device for the bring-your-own-device (BYOD) crowd. The handset has a number of enterprise-friendly features, including AuthenTec’s QuickSec VPN client technology that allows users to access corporate networks when out and about.

Image source: Asymco.

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