Apple Inc. surpassed rival Nokia, the world’s biggest maker of mobile phones, to become the most profitable handset vendor for the first time on the strength of its popular iPhone, according to Strategy Analytics.
Apple’s third-quarter operating profit from iPhone sales was $1.6 billion, while Nokia had operating profit of $1.1 billion from its handset unit, Neil Mawston and Alex Spektor, analysts for the Boston-based research firm, wrote in a report.
Nokia is struggling to hang on to its leading position in smart phones as competition increases from Apple, Research in Motion Ltd.’s BlackBerry and Motorola Inc.’s Droid. Nokia lost six percentage points of smart-phone market share in the third quarter as it posted its first-ever quarterly loss.
“Nokia’s profit margin for its handset division has been shrinking during the global economic downturn in 2009,” Mawston said in an e-mailed release today. “We believe the United States, where Nokia now trails Apple in market share, is the key to Nokia’s recovery in 2010.”
Espoo, Finland-based Nokia’s market share in smart phones with advanced features such as Internet browsers fell in the third quarter to 35 percent from 41 percent, as it posted a 559 million-euro ($834 million) loss, the company said Oct. 15. Nokia the next day replaced Chief Financial Officer Rick Simonson with sales chief Timo Ihamuotila, who had previously worked for Nokia in the U.S.
Nokia rose 2.9 percent to 9.19 euros as of 2:39 p.m. in Helsinki. The shares have fallen 17 percent this year, valuing the Finnish company at 34.4 billion euros. Apple has gained 138 percent in 2009, giving the Cupertino, California-based company a market capitalization of $183 billion.
U.S. Carriers
Ihamuotila this year helped convince AT&T Inc. to offer one of the Finnish company’s most-expensive handsets, letting the device share shelf-space with the iPhone at Apple’s exclusive U.S. carrier. In his sales job, he focused on making Nokia more open to changes from carriers, who have complained that Nokia was unwilling to let them customize phones with their own logos and software.
“A successful fight on Apple’s high-profit home turf can simultaneously help to revitalize Nokia’s margins and help put a check on Apple’s surging growth,” Mawston said.
Apple’s Revenue
Apple had a 25 percent increase in revenue last quarter, compared with a 20 percent drop at Nokia. Apple was helped in the third quarter by high wholesale prices and good cost control, the analysts said.
The iPhone is sold in about 80 countries and last month went on sale in China, Nokia’s biggest market by revenue. Nokia’s handsets are available in more than 150 countries. In the third quarter, Nokia sold about 16.4 million smart phones, the most expensive category of mobile handset. Nokia also sells cheaper phones, down to a 20-euro model for emerging markets.
Nokia last month sued Apple in a U.S. court, claiming infringement of 10 patents and seeking royalties on the 33.7 million iPhones sold since its 2007 introduction.
Via: Bloomberg
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