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Summary:

Despite controlling a much smaller share of the market, Apple is now much more profitable than Nokia, overtaking the handset maker as the most lucrative company in the business of selling cell phones. Apple also overtook Samsung during the last financial quarter, so it actually jumped […]

iPhone3GS-2Despite controlling a much smaller share of the market, Apple is now much more profitable than Nokia, overtaking the handset maker as the most lucrative company in the business of selling cell phones. Apple also overtook Samsung during the last financial quarter, so it actually jumped from third to first place overall among global cell phone companies.

Research firm Strategy Analytics (via Reuters) points out that while Apple is now the most profitable company in the cell phone industry, both Nokia and Samsung both still beat the Cupertino company in terms of sheer size. That’s especially good news for Apple, which makes much more on a per-unit basis than any other mobile phone maker. It makes approximately $320 pure profit on each iPhone sold, according to Strategy Analytics.

Estimated profits for Apple during the third financial quarter of this year are around $1.6 billion, compared with $1.1 billion for Nokia during the same period. It’s a commanding lead, and one that will likely only grow as Apple continues to end exclusivity deals around the world, opening up iPhone sales to more and more potential subscribers.

Of course, there isn’t a direct relationship between Apple’s gain and the slides Nokia and Samsung are experiencing. Other factors are at work, including the growing popularity of Google’s Android platform, which is being adopted by more cell phone makers and network providers. The arrival of the Palm Pre probably also had a negative impact on the handset sales of the two industry leaders.

Nokia is in the midst of a legal battle with Apple over what it sees as blatant copyright violation. Charles recently wrote about the conflict over intellectual property between the two firms. Nokia alleges that the iPhone infringes on not one, not two, but 10 patents it holds regarding wireless tech and standards. The timing of the suit, which comes shortly following a significant drop in market share for Symbian OS, seems quite suspect.

The future for Apple looks bright indeed, so long as it can continue taking in the same incredibly high profit margins on the iPhone. Part of its continued ability to do so is probably due to the fact that the 3GS iPhone revision actually seemed to require very little change on the production side, which would go a long way to keeping manufacturing costs down. A significant update will require more time to become profitable, but Apple’s continued success with the device means that the turnaround time required for that to happen will be remarkably short.

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  1. Learning OSX.com Wednesday, November 11, 2009

    Apple is doing to the phone segment the same thing that they do in the PC segment. Provide high quality product at high profit margins. There are great high-end PCs and high-end phones that have those margins and quality however in those markets they got lost in a sea of cheap products and can do little to differentiate themselves.

    Apple has three things that distinguish them from the other market. Their style, their OS and their marketing.

    1. I agree they are doing the same things in the phone segment as they are in the PC segment. However where Apple in the PC market is trying to chip away at its competitors domination, Apple is trying to prevent losing its dominance in the phone market. Should be very interesting to see if Apple is still a dominate force in the phone market a few years from now. Eventually will the cheaper just as functional smartphones overtake Apple? Only time will tell.

  2. Fake Non-fiction Post Wednesday, November 11, 2009

    [...] “Apple Surpasses Nokia as Most Profitable Cell Phone Maker” and related posts (theappleblog.com) Posted in Non-fiction [...]

  3. “Apple now most profitable handset maker over Nokia” and related posts – KuASha Organization Wednesday, November 11, 2009

    [...] Apple Surpasses Nokia a&#115&#32&#77ost Profitable Cell Phone Maker – TheAppleBlog [...]

  4. It’s not 100% clear to me from the article: are the profits being compared including *only* iPhone profits from Apple, or is that all of Apple’s profit? ie are Macs and software in there playing their part, or has Apple’s *phone only* profit exceeded Nokia?

  5. Prediction: HTC with more Android and Windows mobile7 phones coming will overtake Apple by the end of next year!

    1. Huh? End of the year? You greatly overestimate the speed at which the cell makers move. Android and WinMo7 *might* start to make a small dent by the middle of next year.

    2. Ooops.. my bad didn’t see the “next” on first read. But still. They might have a stake, but “overtake” is a very bold statement.

  6. Apple was NOT more profitable selling cell phones than Nokia in Q3 Sunday, November 15, 2009

    [...] cell phone profitability compared to Nokia. Headlines range from the AppleBlog’s “Apple Surpasses Nokia as Most Profitable Cell Phone Maker” to Reuters’ “Apple tops phone chart as Nokia, Samsung step up” to Silicon [...]

  7. Cheap Nokia Fan Wednesday, March 17, 2010

    Apple has been crushing the competitions for a while and once verizon takes on iPhone service the scales will really be unbalanced. The only true competition I see coming soon are the HTC android models that will be coming to AT&T this year. Nokia still has some of the most amazing phones, but marketing is everything and Apple is definitely dominating.

    Thanks for the great info!

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