updated 11:35 am EDT, Mon July 20, 2009
Apple, RIM reap profits
America's Apple and Canada's Research in Motion now account for a disproportionate amount of global cellphone profits, says Deutsche Bank analyst Brian Modoff. Although together the companies produced only 3 percent of phones sold worldwide in 2008, profitwise, the companies accumulated 35 percent of all operating profits. The largest player in the market reamins Finland's Nokia, which produced 46 percent of phones and 55 percent of profits in 2008.
2009 is forecast to be another banner year for Apple and RIM, with the pair growing to 5 percent of units and a dominant profit share, near or over 58 percent. Behind the companies' unusual clout is believed to be subsidies; AT&T pays Apple roughly $400 for each iPhone, while overall US payments to RIM average $200 for each BlackBerry. By comparison, the average non-smartphone subsidy is only $100.
Modoff notes that Apple and RIM have also unusual advantages unrelated to hardware. The former has thousands of independently-made software titles, more than for any other cellphone. RIM is meanwhile linked with a proprietary e-mail service, considered more secure and efficient than many options. Unknown so far is the impact of the Palm Pre, which offers advantages of its own, such as true multitasking.