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 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.