“I bring this up because today brought some very interesting numbers from the research firm, Strategy Analytics. According to them, Apple has surpassed Nokia as the most profitable phone maker in the world. I’ll throw some numbers at you in a second to show why this is really incredible, but the key takeaway is that this is why, at the end of the day, Apple wins,” Siegler writes.
“While the press and rivals obsess over market share, Apple quietly comes in and makes an insane amount of money. It’s the same in the computer industry. Small market share, huge amount of money. The most important thing for all of these are companies is the bottom line,” Siegler writes. “Apple wins that battle.”
Siegler writes, “According to the report, Apple made $1.6 billion in operating profit off of the iPhone in Q3. Nokia, meanwhile, made $1.1 billion. Let’s put this in perspective. Recent numbers suggest Nokia controls roughly 35% of the worldwide handset market. Apple? About 2.5%.”
Full article here.
MacDailyNews Note: Apple’s share of the smartphone market, the only market in which they compete, is far higher than 2.5%, of course. iPhone’s share of the worldwide smartphone market was pegged at 18% for Q309 by Canalys. Please see related articles below for more info.
Man, I love reading this kind of stuff. I was a subscriber to MacUser Magazine when it folded back in the early Nineties because Apple was on the brink of extinction. I was a Mac fan then and stuck with them. What a comeback story.
Finally some journalist realized that it’s more important to a company to be profitable than to make the most of something.
The same can be said for Apple’s Mac business as well v. other PC box assemblers (Dell, HP, etc.).
Exactly. Apple has a vastly lower market share than Dell, but its market value is over six times higher. Apple is without question the most efficient tech company out there, and arguably one of the most efficient companies out there, period.
Great day to be a Mac fan!
Or look no further than Apple vs. Microsoft.
Or look no further than Apple vs. Dell.
Profitability beats market share any day.
Having high profits with low market share also means that their products are very good because they have a premium products and since there is less people to deal with, you have a more personalized support in case you need it (in 10 years I have only call twice to Apple’s tech support).
“Quality over quantity”
Classic case of Less is More…….a concept Apple has MASTERED! Less complexity and fluff…….More Profit!
Where are the trolls telling us that Apple is obviously ripping us off by making so much profit?
Sorry, have never bought into the less is more argument. With the Mac you get a lot more, i.e. security, iLife, able to run all programs including windows, lower TCO. I have a boss who keeps telling me less is more, what a crock.
Same with iPhone, because you can actually USE it to do the things the other phones do, but do poorly or take too many steps, or are so deeply hidden you don’t know you can do it.
I wonder if not for the tight integration with iTunes and the APP store if the wind would still be behind Apples back on the iPhone. Those 100,000 APPS are a huge differentiator, allowing you to do MORE than what the iPhone ships with in a very cost effective manner.
If your bottom line, is not just about profit this is what happens!
A company make more money with one phone then another with a billion!? LOL
@ Spark
They don’t understand the concept.
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I like Apple and their products, but why is the fact they gouge their customers something to celebrate?
@Apelock: Setting aside the “gouging” slam, Apple’s monetary success is worth celebrating because Apple takes one success and builds future success on top of it.
The more Apple can innovate with their “ill-gotten” gains, the more great products we can buy in the future, building a cycle of virtue that no one else can match.
Besides, as Apple fans, who else would we turn to if Apple weren’t around? It’s not as thought Dell and Microsoft are offering a compelling alternative. No Apple means I get to return to Linux (not an awful thing, just a nuisance) and cheap throw-away phones (again, not an awful thing, but I sure value my iPhone). Not sure what I’d do for a portable music experience.
Most of us witnessed Apple’s slide into irrelevance and to the brink of collapse. This tremendous success story is definitely worth celebrating.
If you make a great product and support it with great brand experience people will pay for it
Wolfram Alpha rocks:
http://www02.wolframalpha.com/input/?i=nokia+aapl
@Apelock
Sorry, $99 for an iPhone is gouging?
You get what you pay for and free cellphones are junk
What’s interesting and IMPORTANT to note is that an accounting change did occur during this time period. If you recall, Apple was distributing iPhone profits over a period of 24 months according to GAAP accounting regulations. With the recent change in regulation, how much of the $1.6BB was actually from prior periods reclassed into the current quarter. If that is the case (and we won’t know until the next annual/quarterly report) Apple may actually have made less than Nokia.
Mind you, I’m not a Nokia fan, but I am just pointing out the potential error to this analysis.
I may be wrong , but my understanding is the new accounting , is for new sales
going forward, and does not change the old sales on the books
“I like Apple and their products, but why is the fact they gouge their customers something to celebrate?”
There is an unfortunate group of people out there who believe that if I succeed, it must be at your expense. I cheated, therefore I won.
It comes from what is called projection. Not calling you out on this, Apelock, but what happens is that, in a given situation,” you” would cheat, and “gouge”, therefore I would. So every one who does something better than you is a cheater.
Not so. If I know what I am worth, and my customer and I enter into an open and above board contract in which he and I agree on what I am worth, what is wrong? Nothing.
But…….many will disagree. Do I care? No
@Spark: I saw what you just did
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@NCMacMan,
Apple has not yet transitioned off of subscription accounting for the iPhone, so your “potential error” is nonexistent. Look it up.
A hell of a lot of companies could learn alot from the way Apple does business.
Market share means nothing if you don’t make any money.
Textbook sound business plan – which very few companies follow!
Apple really do know what theyre doing!
Yes, but the REASON Apple makes more is because they don’t make junk.
The only way to get people to pay a little more is to make something that’s worth more.
@ Apelock,
“I like Apple and their products, but why is the fact they gouge their customers something to celebrate?”
If you truly liked Apple products, you would know that those products were not overpriced.
Take the MacBook Pro. You probably think you could buy a 15″ PC laptop for 1/2 the price of a MacBook Pro. Hell, you probably could get a 15″ PC laptop for 1/3 the price.
The thing is that cheap PC laptop can’t match the MacBook Pro hardware specs. The crappy Windows OS on the cheap PC laptop can’t match the OS on the MacBook Pro. The included software on the cheap PC is crap, compared to what’s on the Mac.
Then there are the tens of thousands of vulnerabilities and exploits associated with the Windows XP/Vista/7 OS verses 2 or three trojans out there attacking stupid Mac users.
The simple fact is Apple makes great products that are easy to use, virtually trouble free and practically immune to malware.
When it comes to PC vs Mac, iPhone vs Crap, you really do get what you pay for.
The users of Apple products do not feel ripped off.
Read this again, all of you in the Apple-should-license-OSX-already choir. Marketshare is no end in itself. It’s not even always a means to an end. Sometimes it means very little.
Apple charges $1000 for $100 worth of hardware and you zombie idiots are actually proud that you overpay. Steve Jobs laughs at you all. Think about that next time you see that spinning beach ball of doom.