The change in the mobile phone market caused by the introduction of the iPhone in 2007 has slightly cut the profits for the handset industry overall, but has most severely affected Nokia and Sony Ericsson, according to data released today from Deutsche Bank. The investment bank issued a note showing how Apple and Research in Motion, the maker of the BlackBerry, garner most of the profits in the handset industry despite their relatively small market share.
The report also shows an incredible loss for Nokia, which saw its share of handset profits cut in half by the shift in the handset market that occurred after the iPhone was released. In 2007 Nokia made about 60 percent of the profits in the industry, and in 2009 it had about 31 percent. Meanwhile the adoption of mobile broadband (and likely the fact that the iPhone is a consumer-focused device only available from one carrier) has helped RIM take about a fifth of the overall industry profits in 2009 as more corporations and people tried to access email and the web on their phones.
However, 2009 represented a bad year for the average industry profits, which the bank believes will rise in 2010 and 2011. Part of that might be a better economic climate, but it’s also likely that after a few years of playing catch-up with the iPhone, the handset makers now have something that can compete with it thanks to Android and more web-friendly phones. The real questions ahead for handset makers are which ones will fall by the wayside thanks to the overall shift in the market? Palm and Sony Ericsson aren’t due for a comeback based on this data and Motorola’s overall share of the profits isn’t much to build a business on.