We've said it before and we'll say it again, market share and profit share aren't the same thing, and just to prove that point, it looks like Apple's iPhone has shot passed Nokia to become the most profitable handset on the market. 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.
That's based on 1.6 billion in Q3 iPhone profits for Apple vs. 1.1 billion for Nokia and their handsets.
Why does this matter to us? High profit margins for Apple means more cash they can re-invest into the iPhone and its technology, and like the MacBook and iMac line (and the boilerplate they keep feeding us on their conference calls) it means they can decide to amp up the innovation, even if costs them a little in the short term. No margin, no room for that kind of competition.
So, Apple, we hope you take a lot of that 1.1 billion, check out your competition, and invest heavily in wowing us again in 2010, b'okay?