How Apple passed Nokia to become the world’s most profitable handset vendor

Apple Online Store According to the latest research from Strategy Analytics, Apple became the world’s most profitable handset vendor in Q3 2009. Nokia slipped into second position, as margins have been hit hard by both the economic downturn and a stagnant presence in the United States.

“We estimate Apple’s operating profit for its iPhone handset division stood at $1.6 billion in the third quarter of 2009. Apple overtook Nokia for the first time, which recorded a lower $1.1 billion of operating profit. With strong volumes, high wholesale prices and tight cost controls, the PC vendor has successfully broken into the mobile phone market in just two years,” Alex Spektor, Analyst at Strategy Analytics, said in the press release.

Neil Mawston, Director of the Wireless Device Strategies service (WDS) at Strategy Analytics, added, “Nokia’s profit margin for its handset division has been shrinking during the 2009 global economic downturn. Strategy Analytics believes that the United States, where Nokia now trails Apple in marketshare, is the key to Nokia’s recovery in 2010. A successful fight on Apple’s high-profit home turf can simultaneously help to revitalize Nokia’s margins and to put a check on Apple’s surging growth.”

MacDailyNews Take: Good luck with that, Nokia.

Global Handset Operating Profits in Q3 2009

The full report, “Apple Becomes World’s Most Profitable Handset Vendor in Q3 2009,” is published by the Strategy Analytics Wireless Device Strategies (WDS) service and is available to Strategy Analytics clients only.

More info here.

MacDailyNews Take: In April 2008, Nokia Chief Executive Olli-Pekka Kallasvuo had the temerity to call Apple’s iPhone a “niche product.” Wonder what he calls it today?

19 Comments

  1. “…the United States, …, is the key to Nokia’s recovery in 2010.”
    Not likely, Nokia phones on T-Mobile are cheap. You replace the battery by going to Target or Walmart and buying a T-Mobile go phone for $39..

  2. “have been hit hard by both the economic downturn “
    Again? you are going to blame the “economic downturn”, the same where apple posted record earnings? who are they trying to fool? their investors?

  3. “A successful fight on Apple’s high-profit home turf can simultaneously help to revitalize Nokia’s margins and to put a check on Apple’s surging growth.”

    While a failed fight can lead to lower margins, a crumbling reputation, declining stocks and… scurvy.

  4. Maybe if Nokia would reduce their inventory from over 200 types of cell phones to a dozen, they might have a ghost of a chance at competing with Apple. At least they would cut down on their logistical, manufacturing and support costs.

    Oh yea, they should probably also pick one mobile OS.

  5. One of the problems for Apple is that they may have built their phones too well. The 2 original iPhones that I got on release day 2 1/2 years ago are still going strong with no problems. They have no moving parts or keys that can wear out. I’ve given these to my parents, and have gotten new ones, but it allowed my parents to get iPhones without having to buy new ones even though they could have gotten a 3G for $99. Even though this is only a $99 phone for the consumer, it is probably a $300 profit for Apple. These original iPhones are going for $200-$300 on ebay. It maybe smart for Apple to not let the next iPhone OS 4.0 to work on these models?

  6. Nokia is a great company, but fell asleep. They will continue to own the low end, but Apple is taking the high end and with it, all the industry profits.

    Apple is Disconnecting Nokia’s Profits. LOL!

  7. My favorite comment from the link offered by MDN:

    Comment from: Mark Laris
    Of course the iPhone is a niche device. SmartPhones in general are niche devices. Last year, Nokia sold almost a half of billion (that a b not an m) cell phones, most of which sold for under $100 each. Now unless a certain ego centric aging hippy living in silicon valley decides to start selling sub 100 dollar phones, then the iPhone will remain a niche product. All this aside, Apple’s insistence on keeping a Nazi like grip on the iPhone will doom it to the same niche as the Mac. When I buy something I want it to do what I want, not only what the aforementioned aging hippy wants me to be able to do and most people feel the same way. That’s why most of us use PCs and not Macs.

  8. With Big Apple profits, that are so much greater than anyone else, we need to find a way to tax them. If we can tax these outrageous profits, that money can be used for green energy and health care. It’s not fair that Big Apple profits while everyone else struggles.

    Just not fair

  9. I’ve had a couple of nokias and I liked them. The interface on them was very fast and they worked just as they should for years.
    Not looking back from my 3gs though ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    Sony Ericsson deserves to go bankrupt though! Crappy phones where it’s very obvious it was more important to get a phone out on the market than to release a good phone.

  10. Isn’t this more evidence that the CDMA market in the United States, while small compared to global GSM market share, is worth the investment of an added CDMA carrier and CDMA version of the iPhone? It shows you the value of these American customers despite their raw numbers. Apple should be able to soak up those profits from every corner instead of having one arm tied behind their back with ATT exclusivity.

  11. Give it up, I tried that (logi, reason) a while ago. Personally, I would love a CDMA iphone. And yes, I understand SVDO has not rolled out yet so no voice and data at the same time. Just think, it might even lighten up the strain on att’s network for everyone else.

    Either way, att just got a permit to put in a cell tower. This time next year I’ll have service in my area.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.