Apple beat out long-time champ Nokia in the third quarter of 2009 to become the world's most profitable handset vendor, according to new data from Strategy Analytics. The researcher said Nokia will have to fight Apple on Apple's home turf.
Dell, and any other PC makers looking to join the mobile
phone market, should take note: Apple's the official example of what it
takes to become king of the mountain in only two years.
A Nov. 11 Strategy
report is showing that in the third quarter of 2009, Apple
surpassed the long-time No. 1 Nokia to become the world's most
profitable handset vendor.
"We estimate Apple's operating profit for its
iPhone handset division stood at $1.6 billion in the third quarter of
2009," Alex Spektor, an analyst with Strategy Analytics, wrote in a
summary of his report. "Apple overtook Nokia for the first time, which
recorded a lower $1.1 billion of operating profit. With strong volume, high
wholesale prices and tight cost controls, the PC vendor has successfully broken
into the mobile phone market in just two years."
The Finnish phone-maker has been hard-hit by the global
recession. While, in an Oct. 30 Strategy Analytics report showing global mobile
handset shipments for the same quarter, Nokia was still the market share
nonetheless underperformed the handset industry average for the fifth consecutive
quarter, shipping 108.5 million handsets worldwide
. Samsung, meanwhile,
shipped 60.2 million handsets during the quarter, which was said to be the
first time since 2006 that a vendor other than Nokia had shipped more than
one-fifth of the world's handsets.
"Nokia's profit margin for its handset division
has been shrinking during the 2009 global economic downturn," wrote Neil
Mawston, director of Strategy Analytics' Wireless Device Strategies
service, in the report summary. "Strategy Analytics believes that the
United States, where Nokia now trails Apple in market share, 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," Mawston continued.
On Nov. 10, Nokia introduced the United States to its first phone to
run a Linux operating system. The
N900, which is untethered to a carrier, is priced at $750 and looks to offer a
more hard-core computing experience than most smartphones. It runs the Maemo 5
open-source OS, includes an ARM Cortex-A8 processor running at 600MHz and has
1GB of application memory plus an OpenGL ES 2.0 graphics accelerator.
There's also 32GB of integrated storage, and 48GB of memory can be added
with a MicroSD card
While PC-maker Apple struts its stuff in the mobile phone
world, phone-maker Nokia has likewise entered the PC space, with its Oct. 13
introduction of the
Nokia Booklet 3G, a slim 2.76-pound netbook with WiFi connectivity, 3G surfing
via the AT&T network and a 1.6GHz Intel Atom Z530 processor
. And then
there's the real kicker: a promised 12 hours of "true"
battery life, which Nokia says is the result of a combination of Intel's
processor and its long-time battery-optimization experience with mobile phones.
Nokia to succeed in the U.S., it will have to partner up with a top-tier
carrier and piggyback on its marketing activities. Apple iPhone has
done it with AT&T and Motorola Droid is seeking to do something
similar with Verizon Wireless," Mawston told eWEEK.
"Nokia will have to become a preferred
partner for a major operator with the Booklet 3G or N900 and then
market the heck out of it. At this stage, it looks like Nokia still has
some work to do on the distribution side in the U.S. and this remains one
of its biggest challenges."