Report says Apple is the most Profitable Cell Phone Maker of Them All

Tuesday, November 10, 2009

In just a little more than two years of its initial venture into the cell phone business, Apple has reigned over Nokia as the most profitable handset maker, says Telephony Online.

The firm estimates that Apple’s iPhone operating profit came in at $1.6 billion in Q3, while Nokia recorded only $1.1 billion in operating profit. ‘With strong volumes, high wholesale prices and tight cost controls, the PC vendor has successfully broken into the mobile phone market in just two years,’ said analyst Alex Spektor in the research note.

Apple holds only 1% of the world’s cell phone market share, but it is able to exceed the profit of the world’s biggest cell phone maker, Nokia. That shows just how much profit Apple is eating away AT&T’s own profit margin by offering $99 to $299 iPhones with another big chunk subsidized by AT&T and other international carriers.

Indeed, by offering exclusivity to one wireless network carrier Apple is able to achieve extremely high profit margins. But should Apple also try to boost their profits by expanding market share, such as opening their iPhones to other networks like Verizon? Hopefully, recent successful multiple carrier model in Europe will inspire Apple to end the one-carrier exclusivity model here in the US. It will be a good decision with consumers getting to pick their favorite wireless networks while Apple makes billions more from the iPhone.

This is an article on The Apps Machine