Mobility

Apple Now World’s Most Profitable Handset Maker

Michelle Maisto covers mobile devices, Android and Apple for eWEEK and is also a food writer.

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Nokia is feeling the squeeze after new data from Strategy Analytics found that the Apple is now the world’s most profitable handset vendor

Nokia has been knocked from its perch as the world’s most profitable handset manufacturer, after new data from Strategy Analytics found that Apple’s iPhone now rules the roost.

The Strategy Analytics report showed that in the third quarter of 2009, Apple surpassed the long-time number-one maker (Nokia) to become the world’s most profitable handset vendor.

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“We estimate Apple’s operating profit for its iPhone handset division stood at $1.6 billion (£955 million) in the third quarter of 2009,” Alex Spektor, an analyst with Strategy Analytics, wrote in a summary of his report. “Apple overtook Nokia for the first time, which recorded a lower $1.1 billion (£657 million) of operating profit. With strong volume, high wholesale prices and tight cost controls, the PC vendor has successfully broken into the mobile phone market in just two years.”

It seems that the Finnish phone-maker has been hard-hit by the global recession.

At the end of last month, a Strategy Analytics report showed that Nokia was still the market share leader for global shipments of mobile handsets. However it nonetheless underperformed the handset industry average for the fifth consecutive quarter, shipping 108.5 million handsets worldwide. Samsung, meanwhile, shipped 60.2 million handsets during the quarter, which was said to be the first time since 2006 that a vendor other than Nokia had shipped more than one-fifth of the world’s handsets.

“Nokia’s profit margin for its handset division has been shrinking during the 2009 global economic downturn,” wrote Neil Mawston, director of Strategy Analytics’ Wireless Device Strategies service, in the report summary. “Strategy Analytics believes that the United States, where Nokia now trails Apple in market share, 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,” Mawston continued.

Nokia has introduced its first phone to run a Linux operating system. In the United States the N900, which is untethered to a carrier, is priced at $750 (£448) and looks to offer a more hard-core computing experience than most smartphones.