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Samsung and Apple Now Account for 86% of Smartphone Industry Growth

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Samsung and Apple have proven to be the only smartphone makers hanging strong in a highly-competitive market.

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Does a rising tide lift all ships?

In some cases maybe, but in the smartphone-manufacturing world, it's becoming increasingly apparent that two companies are overpowering the competition.

Now, we all know that the two superpowers in smartphone operating systems are Apple's (AAPL) iOS and Google's (GOOG) Android.

Apple's iPhones are obviously the only phones using iOS, and as evidenced by the company's spectacular fiscal first-quarter earnings report (see: Apple Earnings: Outstanding Achievement in the Field of Excellence), they are selling like crazy. To be exact, Apple sold a whopping 37 million units during the December 2011 quarter, a year-over-year increase of 128%.

Over in Android territory, results for the hardware makers haven't been hot across the board. Motorola Mobility (MMI), which is set to be acquired by Google, lowered fourth-quarter guidance in early January as its smartphone sales rose by just 8.2%. (See: Motorola Results Point to Apple, Samsung Dominance) And Motorola hasn't been the only Android smartphone maker to disappoint. Former hotshot HTC also saw dramatically slowing sales through the holiday season.

Elsewhere in the industry, Research In Motion (RIMM) remains on the ropes, and Nokia's (NOK) still losing share.

However, Korea electronics giant Samsung just proved that Apple still has one tough competitor left on the hardware side, and the numbers show that the two companies are dividing the smartphone world up between them.

Samsung just reported its fourth-quarter earnings results, and despite some weakness in areas like LCD panels, Samsung is more than hanging tough within the smartphone world.

Samsung's Android-powered Galaxy phone line appears to have squeezed out much of its Android competition, allowing it to survive the assault of the iPhone 4S, which was the first iPhone to debut in the fourth quarter.

Samsung didn't report unit sales numbers, but the research firm Strategy Analytics estimated that Samsung sold 36.5 million smartphones in Q4, equaling a 241% year-over-year increase. In fact, while Apple sold more units, Samsung's growth rate was actually far greater.

Regardless, Apple's and Samsung's combined fourth-quarter market share was 47.4%, up from 26.7% the year before.

Put another way, as the two titans' sales rose a combined 173%, versus a miserable 10% for the remaining players.

Put a third way, the two companies accounted for an insane 86% of the industry's unit growth in the quarter.

Which of these guys will ultimately win?

It doesn't really matter. Given how fast the rest of the competition is falling off, there's plenty of money for them to split.

Twitter: @MichaelComeau

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Position in AAPL
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