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Analyst: Nokia profit down to where Apple was four years ago

updated 11:45 am EDT, Fri November 4, 2011

Canaccord shows Apple reversing Nokia fortune

Apple has put Nokia in nearly the same market position it was in four years ago, Canaccord Genuity analyst T. Michael Walkley said in a research note on Friday. Where the iPhone had four percent of the cellphone industry's profits in 2007 to Nokia's 67 percent, the rapid Nokia share decline and Apple's own rise to number two have reversed the situation. Apple now makes over half the profits in the business at 52 percent, while Nokia is at the exact same four percent as the company it once dismissed.

The swap in the space of four years came both as a virtue of both device focus as well as Nokia's attitude towards smartphones. Apple focuses exclusively on smartphones and can take advantage of higher prices and profit margins on every phone it sells. Nokia sells smartphones, but the core of its sales are still basic feature phones, where low prices are often the only factors that determine sales and where profit margins are very thin.

Nokia is also widely known to have dismissed the iPhone as a threat for at least the first two years on the assumptions that its open Symbian platform and dominant share would automatically keep it in the lead. It didn't have an iPhone alternative until the 5800 XpressMusic and was slow enough to modernize Symbian and the phones themselves that it led to Stephen Elop replacing earlier CEO Olli-Pekka Kallasvuo. This year, Elop said the company was switching to Windows Phone after admitting that the firm was forced into drastic steps because of the iPhone.

Separately, Walkley cited "checks" that showed the iPhone 4S was the top-selling phone at AT&T, Sprint, and Verizon for all of October, even with the mid-month introduction. The $99 iPhone 4 was now at least within the top three at each carrier, he added. The prediction led him to expect Apple's best-ever quarter for iPhone shipments by a wide margin, at 29 million devices.



By Electronista Staff
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  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +1

    What a terrible collapse of a

    company. How could they have let things get that much out of hand in such a short time? Nokia's a very large company and at some point they could have turned things around before it got so bad. I think that arrogance played a big part of its downfall. It seems they had some prototypes of touch-smartphones, but didn't bother to go through with it, most likely thinking that consumers prefer physical keys. Whatever the reason, I guess they're all pretty much regretting they didn't do more to slow down their market share loss. Feature phones have seen their day and there's no going back.

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