Apple beats Nokia in handset profits as smartphone wars continue

Strategy Analytics believes Apple to have became the world’s most profitable handset vendor in Q3 2009. Nokia slipped into second position, with its profit margins hurt by the economic downturn and sales stagnation in the US.

Alex Spektor, Analyst at Strategy Analytics, said, “We estimate Apple’s operating profit for its iPhone handset division stood at $1.6 billion in the third quarter of 2009. Apple overtook Nokia for the first time, which recorded a lower $1.1 billion of operating profit. With strong volumes, high wholesale prices and tight cost controls, the computer vendor has successfully broken into the mobile phone market in just two years.”

Neil Mawston, Director of the Wireless Device Strategies service (WDS) at Strategy Analytics, added, “Nokia’s profit margin for its handset division has been shrinking during the 2009 global economic downturn. Strategy Analytics believes that the United States, where Nokia now trails Apple in marketshare, 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.”

Apple’s success comes as Orange reveals itself to have sold 30,000 iPhones to its customers within the first day of the product’s release through that network in the UK.

In comparison, the Android-powered Motorola Droid achieved maybe 100,000 sales, which analysts warn isn’t a strong enough showing for the competing product to become the ‘iPhone-killer’ the gadget press were calling it pre-launch. MKM Partners analyst Tero Kuittinen said, “I have this nagging suspicion that Android is being overestimated by technology enthusiasts.”