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Samsung battery scandal sees Huawei take most profitable Android brand topspot

Huawei smartphone

Chinese smartphone company Huawei has dethroned Samsung as the most profitable Android brand. It has taken a lead after Samsung was stung recently by the exorbitant failure and callback of the Galaxy Note 7, a report from research firm Strategy Analytics suggests.

Huawei is said to have generated more than $200m in smartphone operating profit before interest and tax worldwide during the third quarter of 2016, making it the second most profitable smartphone vendor overall across the iOS/Android divide.

Vivo and Oppo, Huawei's native rivals, came in third and fourth place. At the top of the pack remains Apple - it continues to hold the lion's share of global smartphone operating profits, earning a total of $8.5bn (£6.8bn) in Q3, which is 91% of the total share.

"Three of the world's top four most profitable smartphone vendors are currently Chinese. Huawei, Vivo and Oppo have not only improved their smartphone product line-ups this year, they have also enhanced their operational abilities and kept a tight lid on expanding distribution costs," said Strategy Analytics director Linda Sui.

Huawei’s rise was attributed to “an efficient supply chain, sleek products, and effective marketing” but didn’t expand on why Samsung lost its position. It’s not hard to figure that out, the Galaxy Note 7 certainly played its part, but it does give Samsung something to prove as well as intense motivation to make a strong comeback with the Galaxy S8 early next year.

"We expect Huawei to maintain steady profitability into the first half of 2017," Neil Mawson, executive director of Strategy Analytics, told the South China Morning Post. Mawston's forecast is founded on Huawei's increasing smartphone shipments and efficient operating costs.

Last week, Richard Yu Chengdong, chief executive of Huawei's consumer business group, said that the company aims to be the second biggest phone maker in just two years.

"It's a marathon rather than a sprint in the smartphone market, which is highly competitive and complicated," he said.

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