February 14th, 2014 
DCA After four straight years of double-digit growth, the mobile phone market has hit a wall. Excluding Chinese vendors, the industry is likely to see little or no revenue growth this year, Raymond James analyst Tavis McCourt said in a research note late Monday.
“The great moderation of mobile device growth is upon us,” McCourt wrote.
Revenue growth from publicly traded mobile phone vendors, which account for 70% of the industry total, slowed to 7.3% year over year in the fourth quarter, the slowest pace since the recession, McCourt said. Based on the companies’ first-quarter guidance, revenue growth is likely to dip to 1.8%, he said.
Apple (AAPL) and Samsung continue to soak up all the industry’s profits, McCourt says. Apple claimed 87.4% of phone earnings before interest and taxes in the fourth quarter, he said. Samsung took in 32.2% of industry profits. Because their combined earnings were higher than the industry’s total earnings as a result of many vendors losing money in Q4, Apple and Samsung mathematically accounted for more than 100% of the industry’s earnings.
A year ago, Apple accounted for 77.8% of mobile phone industry profits, followed by Samsung with 26.1%, McCourt said.
“It remains unclear to us where any non-Chinese vendor outside of Apple and Samsung will obtain the profits necessary to re-invest in the business,” McCourt said. “The mobile device market continues to look like an Apple and Samsung market in the developed world, with Chinese-based vendors continuing to take share in emerging markets.”
The mobile phone market has been seeing a lot of deal-making lately among the also-rans.
Microsoft (MSFT) is set to close its acquisition of Nokia’s (NOK) handset business later this quarter. It announced the $7.2 billion purchase on Sept. 3.
China’s Lenovo cut a deal last month to buy Motorola Mobility from Google (GOOG). The acquisition will make Lenovo a major player in the global smartphone market and strengthen its presence in North America, Latin America and Europe.
In December , Canadian smartphone maker BlackBerry (BBRY) signed a five-year device development and manufacturing deal with contract manufacturer Foxconn. The initial focus of the partnership is the development of a consumer smartphone for Indonesia and other fast-growing markets in early 2014.
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