Apple Widens Lead Over Nokia as Most Profitable Handset Manufacturer

[Mal67]

$1.1 billion vs $1.6 billion

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.

That's great news for apple and their shareholders but when comparing operating profits how could the writer use the word only to describe the difference between the amounts.

 

[Shiner]

As a stockholder, I don't mind Apple holding onto the profits at the moment (31B+ in cash), when the stock price has made me 106% in the past year. Having $31B in cash allows Apple to continue to create the best products on the market, and create them in ways everyone else wants to compete with or flat out copy. Remember when other manufacturers had a hard time getting flash memory for their devices because Apple entered into contracts with the manufacturers tying up much of the flash memory by paying CASH. Many of the other manufacturers were pissed because they couldn;t do the same.

I like apple products but I love money.

I am always amazed with people on this site. They are so in love with apple that they will practically make up anything to justify something apple does. As a former bonds trader, I am blown away someone would actually defend a company with a 31B cash reserve with no payout to shareholders!! I must say I am glad you are out there. More money for the rest of us.

 

[Mattie Num Nums]

Ahh, thats why the Nokia people are suing

You do realize Nokia is more than a Cell phone maker right? They make billions in Technologies and Licensing.

I like apple products but I love money.

I am always amazed with people on this site. They are so in love with apple that they will practically make up anything to justify something apple does. As a former bonds trader, I am blown away someone would actually defend a company with a 31B cash reserve with no payout to shareholders!! I must say I am glad you are out there. More money for the rest of us.

Yeah I bet Microsoft is paying you to post </fanboy>

 

[Speedy2]

This may change in future, but as it is now it looks as screw up relationship shareholders/company IMHO.

Nice try making AAPL stock look bad, when in fact it doesn't. Dividends are only one part of your profit, and for most tech stocks a very minor part.

Stocks that have been looking bad over the past 8 years or so:
- Microsoft
- Intel
- Nokia
- you name it

These three are all paying dividends, but the overall yield is abysmal compared to AAPL or RIMM or GOOG or (you name it), who don't pay any dividends.

 

[*LTD*]

Well done Apple... but this story stinks of apple fanboism. I think if you looked at Nokia's market share of mobile phone use compared to Apple's the numbers would tell a different story. (See previous post 38% vs 7%...and yeah Apple is fleecing us!)

Plus we are on the cusp of an Android revolution with regards to what that platform is capable of. It will be like PC vs Mac all over again. No doubt the iPhone will retain the style crown, but will not compete on price and market share with the other mass producers. The iPhone will always be successful in its own right, but it will be the Mac of the mobile phone world (no bad thing there ).

Case in point.. I love my Mac's (iMac/Macbook pro) but I chose an Android HTC Hero. Sometimes I have to admit the competition makes a better product.

The issue is profitability, not market share. Everyone knows Nokia has the lion's share of the market, with some of the lousiest phones.

 

[Mattie Num Nums]

Ever wonder how much wider the margin will get as they close the gap on the volume of phones sold? Apple's 2.5% marketshare and $1.6B vs Nokia's 30% marketshare and $1.1B. THINK ABOUT IT.

According to Wikipedia (just a quick glance no time for major research)... Apple made around 30 billion USD in revenue. Nokia made 55 billion Euro in revenue.

 

[mccldwll]

Correct me if I'm wrong, but Apple is not distributing profits to shareholder, for how long now? As shareholder you are not getting a single cent out of all this profit. The paradox is that as shareholder you can get a piece of the cake only selling shares. You have only one chance to make money, then you are out business (for the shares sold, that is).

This may change in future, but as it is now it looks as screw up relationship shareholders/company IMHO.

You're wrong (but right to be humble with your opinions). It's laughable to see the straw argument that non-dividend paying growth companies aren't doing anything for their shareholders. Ask any investor if he would have preferred to be in aapl or ibm over the past 5-10 years. pfe, pg, ge, c, or goog. If you have a thousand shares of aapl, sell a few. Decide what you need to pull out. Total return investing makes far more sense, and is far more financially productive, than relying on dividends. Better hurry. You'll be late for class.

 

[Speedy2]

As a former bonds trader, I am blown away someone would actually defend a company with a 31B cash reserve with no payout to shareholders!! I must say I am glad you are out there. More money for the rest of us.

Maybe it is good that you WERE a bonds trader.

You must know that those 31B in cash are not going to disappear. So if you hold on to your stock, sooner or later you will get your fair share of it, because you OWN part of it. Maybe because the board decides to pay a huge one-time dividend (like MSFT did) or maybe they are buying a company without raising money or diluting their stock. In the current economy it might be a wise move to hold on to some good reserves and not sheepishly follow the Wall Street mantra that you must use all your available money to invest in something bigger than yourself. An idea that brought us all into the mess we're (still !) in.

We don't know what Apple is planning in the long run, so none of us is in a position to judge whether these ample reserves are good or bad, really. If you don't like the stock because of that, don't buy it. But don't say, it's oh so terrible, because it isn't.

 

[mccldwll]

According to Wikipedia (just a quick glance no time for major research)... Apple made around 30 billion USD in revenue. Nokia made 55 billion Euro in revenue.

Revenue, num nums. How about earnings? The idea of being in business actually is to make money. Gravel quarries handle a lot of product, but diamond mines are much more profitable.

 

[spazzcat]

Well done Apple... but this story stinks of apple fanboism. I think if you looked at Nokia's market share of mobile phone use compared to Apple's the numbers would tell a different story. (See previous post 38% vs 7%...and yeah Apple is fleecing us!)

Plus we are on the cusp of an Android revolution with regards to what that platform is capable of. It will be like PC vs Mac all over again. No doubt the iPhone will retain the style crown, but will not compete on price and market share with the other mass producers. The iPhone will always be successful in its own right, but it will be the Mac of the mobile phone world (no bad thing there ).

Case in point.. I love my Mac's (iMac/Macbook pro) but I chose an Android HTC Hero. Sometimes I have to admit the competition makes a better product.

I think Andriod is going to be a geeks toy. I think its a great phone, and will make the iphone even better, but their marketing is wrong right now...

 

[topmounter]

General Motors may sell a lot of cars, but that doesn't mean I want one.

 

[Mr Maui]

According to Wikipedia (just a quick glance no time for major research)... Apple made around 30 billion USD in revenue. Nokia made 55 billion Euro in revenue.

Maybe you should compare apples to apples, not apples to oranges.

55B Euro is about $80B, so Nokia's total revenue is almost 3x Apple's revenue according to YOUR numbers (as I haven't verified them). I believe Nokia is ALL (or ALMOST ALL) phones.

Of Apple's $30B in revenue, what percentage of that is from the iPhone. Leave out the Mac revenue (Nokia doesn't make computers), and the iPod revenue (Nokia doesn't make music players), leave out the OS, iTunes and App Store revenue (Nokia has none of those) ... THEN try doing a comparison.

The article was comparing Apple's "phone" earnings to Nokia's "phone" earnings ... apples to apples.

 

[spazzcat]

Agreed. Apple is going to have to accelerate the development cycle to stay ahead in this game. I just hope they realize it...

I said the same thing a few weeks ago and people told me I was crazy. The phone market moves much faster then the computer market. I see new iPhones every 6-9 months in the future.

 

[mccldwll]

I like apple products but I love money.... As a former bonds trader, I am blown away someone would actually defend a company with a 31B cash reserve with no payout to shareholders!! I must say I am glad you are out there. More money for the rest of us.

Actually, closer to $34B. And very honest of you to say that as a bond trader, you really don't undestand the equities market.

 

[Shiner]

Actually, closer to $34B. And very honest of you to say that as a bond trader, you really don't undestand the equities market.

A bonds trader that does not know the equities market is a broke trader. Might be time to read up on your economics 101.

 

[chevyorange]

Plus we are on the cusp of an Android revolution with regards to what that platform is capable of. \

The revolution was the iPhone. Anything after that is catch up. Perhaps Android may do this - but it won’t be revolutionary.

 

[Mr Maui]

A bonds trader that does not know the equities market is a broke trader. Might be time to read up on your economics 101.

No need to argue with each other, but perhaps you can name a few bond holdings you had in the past year that had a 106% total return on investment (like AAPLs stock price growth). Do not include multiple trades or options trades on anything ... only a single buy and hold for one year.

 

[mccldwll]

A bonds trader that does not know the equities market is a broke trader.

Aren't you a former bond trader?

 

[Mr Maui]

Aren't you a former bond trader?

Let's see if he responds to my prior post. I'd love to see him name ANY bond (he doesn't even have to have traded it in the past year if he's a "former" bond trader) that has had a 106% return on investment in the last year like AAPL.

 

[Veri]

Might be time to read up on your economics 101.

Making money from wild stock price increases when the stock does not pay dividends is irrational/unenlightened selfishness, getting in on a sophisticated version of a Ponzi scheme. Of course you'll make money if you get in early, but so what? American capitalism is (was ) not about individuals making short term profits at all costs.

Ask yourself: when you buy stock, what are you actually buying? Why does the price go up? If your answer is not "because the product I am buying is working for me" then you might as well be trading in collectibles.

 

[Mattie Num Nums]

Maybe you should compare apples to apples, not apples to oranges.

55B Euro is about $80B, so Nokia's total revenue is almost 3x Apple's revenue according to YOUR numbers (as I haven't verified them). I believe Nokia is ALL (or ALMOST ALL) phones.

Of Apple's $30B in revenue, what percentage of that is from the iPhone. Leave out the Mac revenue (Nokia doesn't make computers), and the iPod revenue (Nokia doesn't make music players), leave out the OS, iTunes and App Store revenue (Nokia has none of those) ... THEN try doing a comparison.

The article was comparing Apple's "phone" earnings to Nokia's "phone" earnings ... apples to apples.

Nokia is more than just Cell phones why is it hard to understand that.

 

[Mr Maui]

Ask yourself: when you buy stock, what are you actually buying? Why does the price go up? If your answer is not "because the product I am buying is working for me" then you might as well be trading in collectibles.

Well said ... go Beanie Babies!!!

Nokia is more than just Cell phones why is it hard to understand that.

Please clarify the percentage of Nokia's business that "IS" cell phones then. THEN, and ONLY THEN, can you compare their revenues (or profits) to the iPhone revenues (or profits).

Nokia 2009 Q3 financials

Guess you were right ... ONLY 70% of Nokia's business is phones. But remember, they are also LOSING marketshare to Apple and others every day.

Please remember, my response came along because you were comparing AAPL anf NOK total revenues when the original point of this article was comparing Apple's PHONE PROFITS to Nokia's PHONE PROFITS. Nothing more. Apple's mobile phone marketshare is 2.5% and Nokia is significantly higher, yet Apple made an ADDITIONAL $500M in profits from their small phone marketshare than Nokia did from their MUCH LARGER mobile phone marketshare.

 

[fifthworld]

You're wrong (but right to be humble with your opinions). It's laughable to see the straw argument that non-dividend paying growth companies aren't doing anything for their shareholders. Ask any investor if he would have preferred to be in aapl or ibm over the past 5-10 years. pfe, pg, ge, c, or goog. If you have a thousand shares of aapl, sell a few. Decide what you need to pull out. Total return investing makes far more sense, and is far more financially productive, than relying on dividends. Better hurry. You'll be late for class.

But how I'm wrong? You get the money only when you sell your shares, you are not getting any of the profits Apple made, as I said. And, as far as I know, the value of the total shares is way higher than the value of Apple assets. This huge value is based in the fact/hope than somebody else will buy these shares. Is not something like this that brought down the real estate market? Way screw up economy, looks to me.

 

[Mattie Num Nums]

Revenue, num nums. How about earnings? The idea of being in business actually is to make money. Gravel quarries handle a lot of product, but diamond mines are much more profitable.

Net Income - 4.33 Billion USD vs. 3.98 Billion Euro according to Wiki

 

[fifthworld]

Revenue, num nums. How about earnings? The idea of being in business actually is to make money. Gravel quarries handle a lot of product, but diamond mines are much more profitable.

But if earning is so important in being in business, where the idea of creating a product o delivering a service stand? I don't recall people cheering in 2007 when the oil companies made record profits. Where you?