Apple takes bite out of Nokia profit

Apple has overtaken Nokia as the most profitable handset maker, says a research report.

By TheStreet Staff Nov 11, 2009 4:30PM

TheStreet.comBy James Rogers, TheStreet.com

 

Apple has overtaken Nokia as the world's most profitable handset maker, according to research released Wednesday.

 

The Finnish handset giant slipped into second place during the third quarter, according to the Strategy Analytics report, as Nokia felt the impact of a tough economy and a stagnant U.S. presence.

 

"Nokia's profit margin for its handset division has been shrinking during the 2009 global economic downturn," said Neil Mawston, director of Strategy Analytics' Wireless research division, in a statement.

 

Strategy Analytics estimates that iPhone-maker Apple's operating profit was $1.6 billion during the third quarter, compared to Nokia's $1.1 billion.

 

Bing: More on Nokia

 

"Apple overtook Nokia for the first time," added Alex Spektor, an analyst at Strategy Analytics. "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."

 

The U.S. is nonetheless key to Nokia's efforts to revitalize its business, according to the research firm. "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," explained Mawston.

 

Strategy Analytics' research, however, comes days after IDC reported that Nokia shipped the most smartphones during the third quarter, followed by BlackBerry-maker Research In Motion and Apple.

 

IDC also found that handsets based on Google's Android operating system, which are sold by HTC, Samsung, Sony Ericsson and Motorola, are generating plenty of buzz. Most recently, Motorola unleashed its Droid phone, which is based on the Android OS.

 

Telecom giant Verizon says that it sold "a lot" of Droid phones during its first weekend, although there have been rumblings of sluggish sales.

 

Broadpoint AmTech analyst Mark McKechnie estimates that Verizon sold more than half of the 200,000 Droid phones Motorola supplied to its stores. Michael Cote of the Cote Collaborative believes Verizon has sold at least 400,000 Droid phones. Even the higher number, however, is dwarfed by the million phones sold by Apple during the three days following the iPhone 3GS launch last year.

 

AT&T's exclusive iPhone sales agreement with Apple is set to expire next year and Verizon is widely expected to add the popular phone to its lineup.

 

Related Articles

 

Motorola Droid not as lifeless as first thought

 

AT&T beats Verizon with cash

 

Businesses suffer from big security gaps

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
267
267 rated 2
467
467 rated 3
605
605 rated 4
645
645 rated 5
691
691 rated 6
617
617 rated 7
459
459 rated 8
313
313 rated 9
130
130 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BXTHE BLACKSTONE GROUP L.P10
CELGCELGENE CORP10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.