Apple dominates smartphone profits

Apple nabbed nearly half of the available profits in the $6 billion (€4.6 billion) mobile phone market in Q2 despite generating only 3% of global sales, according to Asymco.
The app production and industry analysis firm said Apple generated 48% of overall market ebit during the quarter, making the device maker one of the most profitable of the past 12 months
Apple's Q2 share was more than double that of closest competitor Nokia, even though the Finnish vendor captured 34% of total sales.
The disparity is due to Apple's emphasis on profitability over sales, as well as the increasing importance of the smartphone market, Asymco said.
Apple and RIM, both exclusive smartphone vendors, have gone from a combined 7% profit share to 65% in the last three years.
The data indicates that handset makers have yet to come up with a real response to the iPhone, Asymco said.
Samsung and Motorola eked out a respective 1% and 2% share of the ebit pie in 2Q10, after eight quarters of losses, but LG sank to a loss after years of profit.
The overall available profits in the market dipped to under $4 billion at the worst point of the recession, but had recovered to $6 billion in last year's holiday quarter.
While Apple has been losing ground to Android in recent months – the platform is now the biggest-selling US smartphone OS – Asymco does not expect it to challenge Apple's profit share.
It points out that smartphone leaders Nokia, Apple and RIM will never adopt Android, as it would further threaten their margins. As a result, Google has been forced to hitch its wagon to the vendors with the lowest shares of the smartphone market.
“That means Android is aligned with the biggest losers in the industry,” Asymco said.