Report: Apple’s iOS grabbed a record 88.7% of smartphone profits in Q4 2014, Android fell to a new low of 11.3%

Google may be winning the mobile OS market share race, but Apple continues to dominate in smartphone profits. In fact, iOS grew its profit share to a new record high of 88.7 percent in Q4 2014, while Android hit a new record-low of 11.3 percent.

The latest data comes from Strategy Analytics, which estimates global smartphone operating profit reached $21.2 billion last quarter, growing 31 percent annually from $16.2 billion in Q4 2013. Of that former figure, Apple took $11.4 billion home and Android smartphone makers took $2.4 billion.

A year ago, Apple’s iOS captured 70.5 percent of the market, while Android hardware vendors had 29.5 percent. In other words, iOS stole 18.2 percentage points from Android between Q4 2013 and Q4 2014.

We’ve known for a while now that Apple’s premium product strategy is highly profitable, but these figures further show that it is increasingly profitable in the larger market picture. Strategy Analytics also points out that Android’s weak profitability for its hardware partners could be worrying for Google, because if major smartphone manufacturers “cannot make decent profits from the Android ecosystem, they may be tempted in the future to look at alternative platforms such as Microsoft, Tizen, or Firefox.”

The other point to remember here is that the Android-iOS duopoly doesn’t leave any breathing room for competitors. Notice in the tables above that only Apple and Android hardware partners are turning a profit. Those zeroes across the board are not unique to the Q4 quarter.

Earlier this week, IDC found that Android and iOS accounted for a new high of 96.3 percent of smartphone shipments in 2014. As we noted then, there will be increased competition this year from Microsoft (with Windows 10), BlackBerry (with BlackBerry 10), Mozilla (with Firefox OS), and Samsung (with Tizen).

So far, nothing has broken Apple and Google’s stranglehold on the smartphone industry. Yet the pie continues to grow, and sooner or later, a third player will muscle in.

[venturebeat]