Apple and Samsung handsets account for over 80 percent of the smartphone industry's profits

Duopoly could threaten smartphone market competition, says IHS

Apple and Samsung account for 81 percent of the smartphone industry's gross profit, according to a study by IHS.

Research firm IHS reports that Apple accounted for over 50 percent of total smartphone industry profits last year. Samsung took 29 percent of the industry's overall profits in 2012. The third most profitable handset maker was found to be Nokia, according to IHS.

The study found that Apple was responsible for 21 percent of smartphones sold. In total, the iPhone maker took 10 percent of both smartphone and feature phone sales.

According to IHS, Samsung has quickly become the top-selling Android handset maker on the backs of its Galaxy line of smartphones. The IHS report said that Samsung's overall smartphone profits only accounted for around three to four percent until the release of its first Galaxy phone.

Over the past three years, Samsung has seen an eight-fold increase in smartphone revenue.

Coming in third to Samsung and Apple is Nokia. The Lumia 920 maker accounts for only four percent of the smartphone industry's profits. After Nokia, no other handset maker maintains more than a three percent stake in the industry.

IHS warns that the gap between the top handset makers and the rest of the field could cause problems in the future. The firm's principal analyst of broadband and digital home, Lee Ratliff, said the smartphone duopoly will make it hard for other firms to break into the industry.

"The position now held by Apple and Samsung is unprecedented even in an industry known for consolidating profits, and such concentration of power could signal an industry soon to be dominated by a duopoly," noted Ratliff.

"IHS iSuppli believes the scale required to compete effectively in all regions, while investing heavily in both research and marketing, is simply beyond the reach of all but the largest brands."

The IHS study comes on the heels of Samsung's recent launch of the Galaxy S4, which some observers believe could mount a serious challenge to the iPhone's dominance.