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Apple grabs nearly 50 percent of handset industry profits



For the better part of a decade, Apple has consistently shown that having a comparatively small market share by volume is no impediment to making money, and lots of it. Despite the company's PC share hovering in single digits through most of the 2000s, Apple has been far and away the most profitable computer hardware maker for many years (and generally coming second only to software-centric Microsoft in generating cash). Now that inverse relationship between share and profits continues into the mobile space.

Analysis firm Canaccord Genuity estimates that Apple accounts for only 3.9 percent of total global volume sales of mobile handsets. However, the iPhones sold in the third quarter of 2010 accounted for approximately 47 percent of all profits in the industry. While the vast majority of handsets sold around the world still fall into the feature phone segment, smartphones are where the money is.

Smartphone specialists Apple, HTC, and RIM grabbed 71 percent of the net profits. Even Motorola -- which has had a long string of money-losing quarters -- has finally returned to the black thanks to its emphasis on Android-based smartphones. Nokia may be outselling everyone else by a wide gap, but they certainly don't seem to be making it up on volume.

Even with Android as a whole gaining market share, the proliferation of different phones will limit economies of scale for manufacturers -- so Apple looks likely to continue its cellphone profitability for some time to come.



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For the better part of a decade, Apple has consistently shown that having a comparatively small market share by volume is no impediment...
 

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Chuckb84

"I love how Apple fans will rave about profits like this, but will still turn around and deny the existence of the Apple tax"

And I love how Winbois ignore the fact that Microsoft has MUCH higher margins than Apple while they rant about the "Apple Tax".

November 03 2010 at 9:51 AM Report abuse rate up rate down Reply
chris

That's right. Apple's $50+ billion dollars in cash was actually earned by selling lemonade and girl scout cookies outside of walmart. iAde....FTW!

November 03 2010 at 7:41 AM Report abuse rate up rate down Reply
Patrick

Neil, this is your mother. Time for bed.

November 02 2010 at 10:26 PM Report abuse rate up rate down Reply
bill

All this tells me is the iPhone is overpriced.

November 02 2010 at 9:04 PM Report abuse rate up rate down Reply
3 replies to bill's comment
Gimpymw

You're wrong. The article specifically refers to the global market for handsets.

November 02 2010 at 7:41 PM Report abuse rate up rate down Reply
redcard

Go bore people somewhere else

November 02 2010 at 7:31 PM Report abuse rate up rate down Reply
redcard

Nice analysis and conclusion. All based on information you consider to be untrue.




November 02 2010 at 7:21 PM Report abuse rate up rate down Reply
ben

LOL still bitter?

November 02 2010 at 7:20 PM Report abuse rate up rate down Reply
cmsb55

I love how Apple fans will rave about profits like this, but will still turn around and deny the existence of the Apple tax

November 02 2010 at 6:45 PM Report abuse rate up rate down Reply
4 replies to cmsb55's comment
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