Are you wondering how a company like Nokia can, on the one hand, claim that it is selling more smartphones every day than the iPhone, and yet be kicking its CEOout the door like a mangy dog? These pie charts ought to make everything crystal clear.
Advisory firm Canaccord Genuity told investors to buy, buy, buy Apple stock on Tuesday, targeting Apple’s price at $356 per share… and to give investors an idea on why they were so excited about Apple’s prospects, they accompanied their note with the following observation: even though Apple only sold 17 million handsets in the first half of 2010, Apple has pulled in 39% of the mobile sector’s profit.
Meanwhile, Nokia, Samsung and LG sold 400 million phones last year — over twenty times as many handsets as Apple sold iPhones — and yet their profit was dwarfed by Apple’s in the same period.
As Canaccord Genuity analyst T. Michael Walkley notes, “[W]where most handset OEMs struggle to post a profit or even 10% operating margins… we estimate Apple boasts roughly 50% gross margin and 30%+ operating margin for its iPhone products.”
No wonder the boards of companies like Nokia are lopping off their key executives’ heads and bowling them out the door.Related