2014 was another solid year for Android’s market share growth, but despite that increase the world’s biggest mobile OS saw a pretty heavy drop in profits. Global profits for Android devices are estimated to have dropped by about 50%, which is the first time that Android has seen a massive decline like this.
Samsung’s rough year is partly to blame for the decreased profitability, and combined with the fact that much of the increased market share came from OEMs like Xiaomi with incredibly thin margins, it’s easy to see how there’s less money being made on each Android device sold on average.
Short term, the increased market share is always a good thing, but without being profitable it’s going to be tough for other OEMs to continue making devices. Motorola and HTC are two great examples of companies that struggle to turn a profit in their mobile division thanks to competition on the high end from Apple and Samsung, and eroded profits on the low end due to tons of cheap devices from Chinese OEMs.
More and more manufacturers are slimming down their smartphone portfolio and only offering a few devices per year so they can better focus on a handful of devices to make it profitable. That’s probably a trend we’ll see continue into 2015, especially after this news.