In the newly released Fortune Global 500 list, Apple has been named as the world's most profitable company, reaping in nearly $45.7 billion in profit in the last financial year. The iPhone-maker, which sits at the ninth position in terms of total revenue, topped the list despite a 14.4 percent fall in its annual profits compared to the previous year.
Interestingly, the four companies that followed Apple to round out the top five positions were all Chinese banks, including Industrial and Commercial Bank of China ($41.8 billion), China Construction Bank ($34.8 billion), Agricultural Bank of China ($27.6 billion) and Bank of China ($24.7 billion). Alphabet Inc., which now owns Google, was at No. 9 ($19.4 billion) while Apple's arch rival in smartphone business, Samsung, came at No. 10 ($19.3 billion).
Journey of Apple & Samsung on Fortune Global 500
Apple started its journey on the Fortune Global 500 list at No. 422 in 1995. It dropped off the list between 1998 and 2005, before making a comeback at No. 492 in 2006. Over the last decade, Apple has seen significant growth in revenues and claimed 9th position in 2016.
Samsung, on the other hand, had a chequered balance sheet. The company started off at No. 221 in 1995 and then climbed to No. 120 in 1996, before dropping down to No. 207 in 1999.
Apple suffered an overall revenue decline throughout most of 2016 due to lacklustre iPhone sales. However, the company's overall sales helped it become the most profitable company in the world while Samsung had to deal with the Galaxy Note 7 fiasco, and ended up earning over two times less profits than Apple.
Tectonic shift on the cards?
During its earnings guidance earlier this month, the South Korean tech giant pegged its second-quarter operating profit at 14 trillion won ($12.11 billion), a giant leap from 8.14 trillion won a year earlier. If true, the earnings would make Samsung more profitable than Apple for the first time.
Though Apple is not due to report earnings for the same period until next month, industry analysts expect it to post an operating profit of $10.5 billion.
"Samsung is set to post the biggest operating profit for the second quarter and for the whole year, surpassing Apple and any other major tech company, as its earnings will be even better in the third quarter," Kim Young-woo, an analyst at SK Securities, told Financial Times.
Apple is making Samsung rich
In the latest Fortune Global 500 list of the world's most profitable companies, Apple is nine spots above Samsung. But Samsung is primed to overtake Apple sooner than later, according to the latest market estimates.
Following dull iPhone sales over the last few quarters, Apple is counting on its fall arrival, a redesigned iPhone 8, to reverse its fortunes. However, the same iPhone 8 is also said to leverage Samsung's chest.
Unlike Apple, Samsung doesn't owe the majority of its profits to smartphone business. The South Korean behemoth windfall comes from selling display panels and memory chips to companies like Apple.
In addition, Samsung – which controls about 95 percent of the mobile OLED market – is reportedly the sole supplier of the OLED screen- a spec expected in iPhone 8.
The solid sales of the Galaxy S8 and S8+ smartphones are estimated to have helped Samsung post record earnings in the second quarter. The company is also counting on the sales of the Galaxy Note 8 (slated for August, well before the iPhone 8 hits the markets worldwide) to frog-leap Apple.
Samsung is set to announce its second-quarter earnings at the end of the month. Apple's earnings report, meanwhile, is expected on August 1.
