Red flag statement: “These numbers represent the entire mobile handset industry, and not just the smartphone sub-category in which Apple competes. The analyst didn’t break down the profits from just the smartphone category.”

Show me the numbers and the definitions, something smells fishy here.

It’s not that hard to believe. Even the android smartphone makers like HTC, Samsung, and Motorola have Verizon pitching their phones as buy-one, get-one-free within months of their release. Only Apple holds their value firm. Another reason that Apple may not get in bed with Verizon. They won’t do the buy-one, get-one-free thing.

So, back to what’s fishy about this particular story.  Nokia, Samsung, and LG have massive scale at the low end of the market.  As the demand for prepaid phones continues to grow, this low-end is almost entirely subsidized.  Apple has always targeted affluence and there’s nothing different about the iPhone.  If you factor in the entire market then you are comparing high-end phones with higher margins with a far larger bucket of low-end phones with almost no profits.

Comparing Apples the Oranges.

and there’s nothing different about the iPhone

I’m not quite sure where you’ve been the past three years. Taken a long nap, perhaps?

This is another thing I don’t get about the current crop of Apple fans. How is this good for anyone but AAPL shareholders? Of course end-users don’t see Apple’s profit taking in direct costs since their phones are subsidized by AT&T, and their out-of-pocket is pretty much the same for any high-end smartphone. Yet they are saddled with a crappy network. A Verizon iPhone will just kill those margins.

Interesting thing about a possible Verizon phone…not that it will or will not happen. But far fewer than expected would switch according to this survey by Credit Suisse.

AT&T Exclusivity End and potential changers

The quick and dirty of the story is Credit Suisse is bullish on AT&T because they think the whole Verizon switch is overblown.

bosco…and apple still can’t make them as fast as they can sell them…so tell me how a verizon phone will cut into margins…are you saying that apple needs verizon so bad that they’ll cut better terms, now that is crazy talk…remember apple is a worldwide company and seeing how they are operating around the globe tells a much more interesting story…the u.s. market is where the smart phone money is today, but not for long…china (europe/asia/latin america too) is where the future of smart phone (profits) lie and apple is gearing up to do just that…and if profit is the true motive of any company then apple seems to be doing a really good job no matter how crazy some people think the margins are…

Well, it’s good for everyone, actually, not just Apple shareholders. It’s good for people who buy Apple’s products, because those folks get a product that they really like and for which they are willing to pay a premium to own. The fact that Apple can continue to rake in profits off of their innovations mean that they will likely continue to innovate, thus providing the rest of the industry innovations which they can copy (with varying degrees of quality so as to maximize market penetration) and stuff into cheaper products that a larger audience can afford a little easier.