Apple Becomes Fourth-Largest Mobile Phone Vendor

[Carniphage]

Not to Nokia who earned about $4 billion selling them.

$4 Billion - Hmm seems like some of those revenues got lost somewhere!

Nokia's actual profits this year are what exactly. Wasn't it $300M or so?
This is all they get for selling 110M phones?

I am not a master of mathematics, but a bit of division leads me to the conclusion that for every cellphone sold. Nokia makes $3?

Three measly dollars!

iPhone nets about $600 per unit, of which $280 is profit.

$3 < $280.

Nokia is so profoundly unprofitable, it has to sell almost one hundred times more units to match Apple's level of profitability. No wonder the executive team are vanishing.

C.

 

[krischik]

I'd love to see it stripped back to just ultra-smartphones, and then the gap between Apple and the others would be a lot closer.

Define »ultra-smartphone«.

For SmartPhones NOKIA is still on the top as all Symbian-OS phones are considered a SmartPhone.

I don't agree but here you are.

 

[CFreymarc]

Nokia have been producing smartphones since the 1990s. Other than a weird IBM thing in the early 1990s, they pretty much defined what a smartphone was for over a decade with the Communicator line and early N and E series phones.

What they missed out on is the high end touchscreen trend as defined by Apple and the great UI and rich development environment Apple brought to the smartphone. They've been very, very slow to compete and their first attempt was poor by comparison.

Considers how you define smart-phone. If you want to see a train wreck, the Nokia N-Gage was the biggest example of what not to do.

 

[Carniphage]

Personally, I find C++ more readable and easier to understand but then I'm an ancient 41 year old programmer with bad habits, not a 12 year old.

Saying that, there's plenty of talent in 12 year olds...

http://conversations.nokia.com/2010/10/12/app-developer-at-12-years-old/

Arg! Surely there are forum rules against tales of child abuse?

C.

 

[aegisdesign]

$4 Billion - Hmm seems like some of those revenues got lost somewhere!

Nokia's actual profits this year are what exactly. Wasn't it $300M or so?
This is all they get for selling 110M phones?

Woah there skippy.

$4 billion was my guess at numbered smartphone revenue based on 15 million of them sold.

Nokia's overall profit in Q3 was 403m Euro across all divisions. In just smartphones, it was 807m Euro. They lost money in their Nokia-Siemens joint venture again.

I am not a master of mathematics, but a bit of division leads me to the conclusion that for every cellphone sold. Nokia makes $3?

Three measly dollars!

Let's try with the actual figures.

26.5m smartphones sold. 807m Euro profit.

That's 30.45 Euro per handset or $42 roughly.

iPhone nets about $600 per unit, of which $280 is profit.

$3 < $280.

And you've got the iPhone figures from?

Nokia is so profoundly unprofitable, it has to sell almost one hundred times more units to match Apple's level of profitability. No wonder the executive team are vanishing.

C.

From your guess-timate, actually only about 6-7 times as many at the current average selling price. They're selling about 2-3 times as many once you take the seasonal blip of a new iPhone model out of the equation. Apple always sell a load of iPhones in Q3 just after launch of a new model and then it goes back to a general trend much lower.

From the financial results presentations, Nokia are predicting their ASP as going upwards and Apple are predicting their margins as coming down so the profit share is going to narrow. I wonder also how long Apple can continue overpricing the iPhone in the face of increased competition or without a cheaper model.

Incidentally, Motorola sold 3.8 million smartphones in Q3 and a profit of just $3 million. ie. it made 79 cents on each smartphone.

Only Apple gets away with such high margins.

 

[Carniphage]

Woah there skippy.

Let's try with the actual figures.

26.5m smartphones sold. 807m Euro profit.
That's 30.45 Euro per handset or $42 roughly.

Erm...

110M Handsets sold.
$8 euro per handset on average.

Jeezy Creezy that's shocking!

Apple is not predicting a reduction of profitability of iPhone. Just the margin for the company will fall as as result of yet another major product introduction.
Nokia has been saying they will return to the high-end for the last three years. We are still waiting.

Only Apple gets away with such high margins.

Only Apple knows how to add value it seems.

C.

 

[gnasher729]

Nokia earned around $10 billion from their smartphones last quarter alone. RIM $4.62 billion. Apple don't release figures but lets take the earlier guess at 14.1*$600 = about $8.4 billion. So, Nokia is still quite far AHEAD in smart phone revenue. Profit of course is a different matter. Nokia don't have the margins Apple have as their phones cost less and they spend way too much on R&D.

According to the IDC article, Nokia smartphone sales grew by 61%, with average sale prices down from €190 to €136. Let's examine the sale price development: Say you sell 100 phones for €190 = €19000, then 161 phones for €136 = €21986. If the first 100 phones sold for unchanged price, then the next 61 sold for just €47 on average. That's about what I said, customers who don't care for smart phones but don't want to buy the cheapest phone available.

Other numbers say 26.5 million "smartphones". That's 26.5 million times €136 = €3.6bn for smartphones, up from €3.1bn. Nowhere near $10bn. And according to that graph (which I don't know where it comes from), sales of the more expensive phones have been dropping all the last years.

 

[mrochester]

Erm...

110M Handsets sold.
$8 euro per handset on average.

Jeezy Creezy that's shocking!

Apple is not predicting a reduction of profitability of iPhone. Just the margin for the company will fall as as result of yet another major product introduction.
Nokia has been saying they will return to the high-end for the last three years. We are still waiting.


Only Apple knows how to add value it seems.

C.

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

 

[Carniphage]

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

Ah, it always comes down to this.

""Apple gets to be the second biggest company (by Market Cap) on the planet - because its consumers are fools, led by fashion.""

The tiresome argument gets trotted out every day.

If that is the case, one wonders why rival companies don't attempt to be "fashionable" also?

C.

 

[mrochester]

Ah, it always comes down to this.

""Apple gets to be the second biggest company (by Market Cap) on the planet - because its consumers are fools, led by fashion.""

The tiresome argument gets trotted out every day.

If that is the case, one wonders why rival companies don't attempt to be "fashionable" also?

C.

Hey don't worry, I've fallen for Apple's fashionable appeal as an iPad and iPhone 4 owner myself! Let's say it was Microsoft who released the iPhone. Do you think it would have had the same success?

 

[*LTD*]

No point in discussing Nokia until there is a radical shift in their entire strategy. They're profoundly behind when it comes to future growth potential. That big lead is evaporating fast. It's almost RIM-like.

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2001

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2002

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2003

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2004

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2005

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2006

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2007

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2008

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2009

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

2010

I'd say it's probably less about value and more about fashion. I think one day Apple will fall out of fashion, and that'll be the beginning of the end of high margins. Apple are simply riding a crest of popularity right now.

At some point, "fashion" becomes the expected norm. Quite telling when others are trying desperately to follow Apple's lead. Apple has already redefined several markets over the past decade. Seems the only company that REALLY knows what consumers want (and continue to want) is Apple.

 

[Carniphage]

Hey don't worry, I've fallen for Apple's fashionable appeal as an iPad and iPhone 4 owner myself! Let's say it was Microsoft who released the iPhone. Do you think it would have had the same success?

Microsoft released the 360.

Apart from the self destructing Red Ring of Death chip, it isn't a terrible product, and it has met reasonable success. Contrast this with the cool and fashionable PS3 which has been an unmitigated commercial disaster.

Consumers are not stupid. They are happy to pay for technology that delivers the right experiences.

The stupidity is usually from engineers who think feature-count is more important than overall user experience.

C.

 

[*LTD*]

Ah, it always comes down to this.

""Apple gets to be the second biggest company (by Market Cap) on the planet - because its consumers are fools, led by fashion.""

The tiresome argument gets trotted out every day.

If that is the case, one wonders why rival companies don't attempt to be "fashionable" also?

C.

Yep. I sometimes wonder about all the cheap "fools" that choose to (or have no choice but to) slum it with Windows and bad knock-offs of Apple products, when for a little more they can enjoy the Real Thing. Doesn't take much in the way of original thought to walk into a Best Buy and just pick something out of the ocean of mish-mash PCs on display, look for the cheapest one with the most crap shoved into it and ask "so I does this come with Windows? I use Windows in the office, too. Will this get viruses? How do I clean it?"

With a Mac, the average user needs to make an *active* and informed choice to NOT use a Windows-based machine, since they are absolutely inundated with them every day, at every turn.

Even Paul Thurrott, Mr. Windows himself, admitted the following:

Mac OS users have made a conscious technology choice and are therefore typically better informed than their peers. - Paul Thurrott, December 06, 2004

 

[mrochester]

Yep. I sometimes wonder about all the cheap "fools" that choose to (or have no choice but to) slum it with Windows and bad knock-offs of Apple products, when for a little more they can enjoy the Real Thing. Doesn't take much in the way of original thought to walk into a Best Buy and just pick something out of ocean of mish-mash PCs on display and ask "so I does this come with Windows? I use Windows in the office, too. Will this get viruses?"

With a Mac, the average user needs to make an *active* and informed choice to NOT use a Windows-based machine, since they are absolutely inundated with them every day, at every turn.

Even Paul Thurrott, Mr. Windows himself, admitted the following:

Mac OS users have made a conscious technology choice and are therefore typically better informed than their peers. - Paul Thurrott, December 06, 2004

The only 'fools' are those that buy a product based on the name/badge on it. The rest of us buy products that work best for what we want to do.

 

[apple1990]

You are aware that the USA make up only 5% of the worlds population, aren't you?

And I hope that you are aware that the other 95% don't all live in mud holes and do buy mobile phones as well.

So if you want to see people with NOKIAs I suggest you have a holiday abroad.

I live in the uk and most people I know either have bb and iPhones.

 

[apple1990]

The only 'fools' are those that buy a product based on the name/badge on it. The rest of us buy products that work best for what we want to do.

Which is why apple are so popular.

 

[aegisdesign]

I give up.

You can only point people at the actual financial results so many times...

One last go...

http://www.nokia.com/press/press-releases/showpressrelease?newsid=1453008

Some people choose something other than an Apple product because it does something the Apple product doesn't do.

I chose a Nokia because it multitasks, does VoIP impeccably without a cheesy app like Skype or Fring, is made almost entirely of stainless steel and the battery lasts 2-3 days of reasonable use. It has free push email through Nokia Messaging with ANY mail server and good ssh and VNC clients for server admin. It syncs wirelessly with my Mac. iPhones don't do any of that as well as a Nokia and they cost 4 times as much over the life of the contract.

Games? Don't care. 200,000 apps? Don't care. UI for simpletons? Don't care.

It's a tool for business use not a lifestyle statement.

 

[firewood]

Nokia have been producing smartphones since the 1990s. Other than a weird IBM thing in the early 1990s, they pretty much defined what a smartphone was for over a decade with the Communicator line and early N and E series phones.

Actually, Nokia copied a lot of small tablet and smartphone ideas from Palm and Handspring. Nokia never did a good job of defining anything compelling in that space. I remember a PalmOS developers meeting where everybody was pretty much laughing at the usability of the first N-Guage.

 

[firewood]

It's a tool for business use not a lifestyle statement.

That is a rapidly declining reason why consumers choose a particular cell phone nowadays.

For businesses, those big old brick sized cell phones had better antennas, bigger batteries, easier-to-use buttons, easier to manufacture, far less fragile, made plain old calls just fine... nobody makes or buys them any more.

 

[*LTD*]

It's a tool for business use not a lifestyle statement.

It's rapidly becoming all about the latter now. It's a "lifestyle device" - accessible, with "everything on it", serving several, if not all, your needs.

RIM has an issue with transitioning to this new paradigm. Nokia has an issue with transitioning to this new paradigm. Both are suffering as a result.

Apps, apps, apps. That's the name of the game. The new standard.

 

[kdarling]

One of the reasons that Apple makes more on their phones, is that so far they have avoided paying Nokia fees for GSM and WiFi patent licenses.

Some analysts think that could end up being a billion dollar settlement.

Another, more obvious reason, is that Apple doesn't build low profit phones that make communication possible for the masses around the world.

 

[Stella]

Well, Carniphage, you've just proven yourself very incorrect... E-Series are as much as smartphone as N-Series - and very capable devices. E-Series is aimed towards business usage, N-Series traditionally is consumer / multimedia devices. In fact, the difference between the two are software configuration ( i.e., different software on the phone ) and hardware.. but its the same core symbian OS! So yea... leads me on to...

Like I said, Symbian ( and Nokia ) is dismissed due to ignorance and lack of understanding of just how powerful Symbian is, just as powerful as iPhone. iClones will of course dismiss because they don't know what Symbian is cable of.

At the end of the day, people should use what is useful for them... which may not necessarily be the iPhone, which definitely isn't - one size fits all.

Only a small fraction of those smartphones were N-Series devices.
N-Series are Nokia's real smartphones.

C.

 

[AidenShaw]

One of the reasons that Apple makes more on their phones, is Another, more obvious reason, is that Apple doesn't build low profit phones that make communication possible for the masses around the world.

You mean Apple doesn't make phones "for the rest of us™"?

My, what greed has done....

 

[*LTD*]

You mean Apple doesn't make phones "for the rest of us™"?

No one ever said it was gonna be cheap. Not in 1984. Not now.

That ad you're attempting to appropriate for your argument is actually about Macintosh being "for the rest of us" in terms of usability, not price. In that regard, the iPhone fits that idea perfectly. The same basic ideals undergird the iPhone as the Macintosh. The explanation is simple, really. The guy responsible for the Macintosh is also the guy responsible for the iPhone.

Read the body copy next time.

 

[63dot]

I give up.

You can only point people at the actual financial results so many times...

One last go...

http://www.nokia.com/press/press-releases/showpressrelease?newsid=1453008

Some people choose something other than an Apple product because it does something the Apple product doesn't do.

I chose a Nokia because it multitasks, does VoIP impeccably without a cheesy app like Skype or Fring, is made almost entirely of stainless steel and the battery lasts 2-3 days of reasonable use. It has free push email through Nokia Messaging with ANY mail server and good ssh and VNC clients for server admin. It syncs wirelessly with my Mac. iPhones don't do any of that as well as a Nokia and they cost 4 times as much over the life of the contract.

Games? Don't care. 200,000 apps? Don't care. UI for simpletons? Don't care.

It's a tool for business use not a lifestyle statement.

The Nokia is great for what it does, but also same with the iPhone.

I have been watching your interesting discussion with the Carniphage. The two of you are really talking about different issues. While he is not great at math, he's 12 for God's sake and has a better understanding of the key issue here. Give him a break, since he starts talking about market cap when others are talking about profit. Someone else can bring in cash flow and then this whole conversation goes to the dogs. Though I received a business degree, it wasn't until years later after MBA school and dealing with large numbers that I truly understood the concepts of how expenses can really creep up on you even when revenue is high. There is a certain point where you can actually oversell a product. I hope Apple hasn't overplayed their hand with iPhone as I have seen Droid gain some traction to my surprise.

Overall, I will have to agree with Carniphage that people will pay extra for a better experience.

Apple seems to have the corner on delivering on the experience.

So instead of picking apart his math (which by the way is far better than I had a command of at age 12), try and listen to the basic concept of his ideas. The iPhone has been a truly unique product which has no doubt helped Apple Inc's bottom line.

Also, put yourself in his shoes for a second. If you were 12, or 13 or whatever his age really is, wouldn't you want an iPhone over a Nokia? I just don't see a lot of middle school kids with a Nokia or a Blackberry. If it's not the iPhone they have, it's certainly not something they don't want from what I have seen. One thing for sure is that iPhone is cool, and unless something has fundamentally changed with kids, cool is still in.