Apple’s position in the smartphone market continues to improve, and according to Canaccord Genuity analyst Mike Walkley, the company now controls some 41 percent of the market’s profits. In comparison, Apple held about 31 percent of smartphone market profits at the end of 2009.

“These gains come at the expense of Nokia (among others) where share of operating profits has fallen from 57 percent in 2009, to 20 percent at the end of 2010,” Mr. Walkley said.

Despite Apple’s strong profit position compared to other smartphone makers, the company holds only 3.9 percent of the global smartphone market share.

“Smartphone-centric OEMs Apple, RIM, and HTC captured an estimated 67 percent of industry profits in Q4/2010, while Samsung, Motorola, Sony Ericsson, and had strong H2/2010 profits due to product portfolios transitioning to a greater mix of Android smartphones,” Mr. Walkley added. “LG again posted a large operating loss during Q4/2010, as it struggles with the transition from feature phones to smartphones.”

Nokia CEO Stephen Elop hinted that his company is working on a new smartphone strategy to take back some of the market from Apple, and could make an announcement during its analyst report on February 11. Most likely, Nokia could announce it is adopting Google’s Android or Microsoft’s Windows Phone 7 operating systems for new smartphone models.

Looking forward, Mr. Walkley thinks Apple is in a strong position in the smartphone market thanks to the introduction of the iPhone 4 on Verizon’s cell network and the pending launch of the fifth generation iPhone.

Mr. Walkley is maintaining his “Buy” rating for Apple’s stock. Apple is currently trading at US$337.25, up 1.15 (0.34%).