Apple Converts 4% Market into 56% Mobile Profits

Apple Converts 4% Market into 56% Mobile Profits

Photo: shapeshift

Here’s a good riddle: What has just four percent of the market, yet pockets more than half of the profits? The answer is Apple, the tech giant known for squeezing every ounce of profit from its iconic products. According to one analyst, Apple took 4.2 percent of the mobile handset market and transformed it into 52 percent of industry profits. Neat trick, huh?

For Apple, the note by Canaccord Genuity’s T. Michael Walkley also is a bit ironic. When the iPhone launched in 2007, Apple had 4 percent of the market, but Nokia had 67 percent of the industry’s profits. Now, Nokia has just 4 percent of the market and Apple rakes in more than half of the profits. Walkley calls it an “epic reversal of fortunes.”

Just how strong is Apple’s revenue machine? Even after Samsung trimmed Apple’s marketshare from 5.4 percent to 4.2 percent, the Cupertino, Calif. company still had the lion’s share of mobile profits. Apple even beat its previous profit share of 50 percent, Friday reports say.

Speaking of Samsung, the South Korean firm and Apple took in 81 percent of mobile phone industry profits during the previous quarter.

Walkley projects Apple will sell 29 million iPhones during the December quarter, up from his previously forecasted 27 million units. In light of that, Canaccord Genuity raised its price target on Apple shares to $560.

  • Ricardo Governa

    Bloodbath!

  • Ricardo Governa

    Bloodbath!

  • markm49uk

    Lol at the Nokia flip with the external aerial taking a photo of the original iPhone – how things have changed in the last 5 years.

  • FriarNurgle

    Hey every other mobile phone maker…
    hey…
    hey…

    Danger Zone.

  • aga

    Shows how much Apple overcharged for the products I have bought!

  • Mike Jones

    True, but you still bought it.  That’s called “power”.

  • Mike Jones

    That’s an ideal business plan at its best.  (Relatively) few customers, high profit margins.  It means their support resources are not bursting at the seams due to sheer volume (like Microsoft Windows), but they are raking in profits.

  • GeorgeRC

    Another analyst playing with numbers to his own advantage. Did he tell you that it is down from 57% in the second quarter?
    Believing a Wall Streeter to celebrate something Apple?

    http://theforbittenfruit.ndnlf

  • GeorgeRC

    Another analyst playing with numbers to his own advantage. Did he tell you that it is down from 57% in the second quarter?
    Believing a Wall Streeter to celebrate something Apple?

    http://theforbittenfruit.ndnlf

  • Gregspar

    Nokia have 4% of profit where?!?! They’re losing the smartphone race massively, but surely their domination in the developing markets sees them take more of the market than that?!

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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