Apple is now the most profitable player in the cell phone business, overtaking giant Nokia for the crown, reports said Wednesday. Apple earned $1.6 billion in profits during the last financial quarter, besting Nokia’s $1.1 billion for the same period, according to estimates.
Apple also overtook Samsung, according to research firm Strategy Analytics.
Although Apple and rival RIM control together just 5 percent of the cell phone market, handsets earn the two 58 percent of their profits. Apple pockets 32 percent of global cell phone profits, or 8 percent of all mobile revenue. The likely key: Apple has a much higher profit margin compared to competitors.
Apple fans are likely to choose the more expensive iPhone 3G. Apple earns more than $600 per iPhone it sells, but consumers actually pay a much smaller portion with wireless carriers subsidizing the largest chunk.
Nokia and Samsung aren’t standing idle amid Apple’s increasing presence.
Nokia earlier in October sued Apple for alleged patent-infringement. The Finnish company charged Apple was “attempting to get a free ride” from Nokia’s research on GSM, 3G and Wi-Fi transmission technologies. Apple, which said it will “vigorously defend” against the lawsuit, could pay $6 to $12 per iPhone sold, according to Piper Jaffray analyst Gene Munster.
Both companies Tuesday began promoting phones designed to compete with the iPhone and Google’s Android handset operating system. Samsung unveiled Bada, a new smartphone operating system expected to power phones in 2010. Likewise, Nokia began shipping its N900, a phone using the Finnish company’s Maemo operating system.