Apple Tops Nokia as Largest Handset Maker in the World

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When Apple Shrugs

Apple has topped Nokia to become the world’s largest handset maker in terms of revenue, according to research firm Strategy Analytics. Nokia sold five times as many handsets (108.5 million Nokia phones) as Apple sold iPhones (18.65 million) during the quarter, but when it comes to dollars, Apple is now king.

 

“Apple became the world’s largest handset vendor in wholesale revenue terms during Q1 2011,” Strategy Analytics said in a statement. “Fueled by strong volumes and high wholesale prices, the PC maker has risen to the top of the mobile phone market in just four years. In revenue terms, Apple is now the world’s largest handset vendor, smartphone vendor and tablet vendor.”

On Wednesday, Apple reported that it had sold 18.7 million iPhones during the March quarter, which Strategy Analytics estimates to have a wholesale value of US$11.9 billion. That amount handily trounces Nokia’s handset revenue for the quarter of $9.4 billion.

It’s these kinds of stats that muddy the water when talking about the market share battle between Apple’s iPhone and Google’s Android OS platform. Nokia still has the most market share in smartphones in the globe, but is barely a player in the U.S. market, where Google is now #1 and Apple and Research In Motion are battling it out for #2. Android is expected to become #1 in the globe sooner, rather than later, eclipsing Nokia.

On the other hand, back in September, we reported that the iPhone had gobbled up 39% of the entire mobile phone industry’s profits during the first half of 2010, while selling just 2.8% of all mobile phone devices. The iPhone has only grown in popularity since then, while Android devices have gained market share in part because of a proliferation at the low end (read: markedly less profitable) of the market.

In other words, Apple’s share of mobile handset revenues is likely to remain vastly disproportionate to its share of the market as measured by unit sales.

With most of the revenue, how concerned can Apple be about unit market share? That’s a question only Apple executives can answer, and they have chosen to focus on iOS as a whole (iOS includes iPhone, iPod touch, and iPad), and not just the iPhone’s share of the smartphone or mobile phone market.

In the meanwhile, Nokia has pinned its future hopes on Microsoft’s Windows Mobile Phone 7, a move that could allow Nokia to shift its product mix to higher end devices. Of course, that’s utterly dependent on the company then being able to sell those higher end, Windows Phone 7 devices, but Nokia’s marketing prowess and mindshare outside the U.S. is substantial, and not to be dismissed.

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7 Comments Leave Your Own

John Molloy

But, but, but… I thought Bosco said “Android had won!”?

Lee Dronick

Hopefully Atlas will not shrug, at least not for the next 20 years.

Bryan Chaffin

Recognizing the light-hearted sarcasm behind your words, ratty, I don’t think this analysis from Strategy Analytics should be interpreted to say that Apple has won, or even that it has obviated or negated Android’s market share gains.

Apple and Google are righting two different wars and are (or should be) measuring success differently.

Google doesn’t care about handset profits, it cares about data collection and ad revenues. It cares about delivering services.  Google is making all the money that Android handset makers are not.

Apple cares about hardware side and the growth of its own ecosystem that generates its own profits but also generates sales of more hardware. The ecosystem also allows supports (and justifies) Apple’s hardware prices, which are the highest in the market.

This is a big part of why I disagree with my friend Bosco on some fronts (it has nothing to do with the value proposition of Apple’s whole widget approach that I think is fantastic and Bosco rejects).

And none of this should be interpreted as me saying that market share is irrelevant to Apple. Market share is important, it’s just not all of the equation as evidenced by today’s report from SA and Apple’s stranglehold on mobile handset profits.

Tiger

Very diplomatic Bryan.

You may remove one ding from the Apple Death Knell counter….

Happy Easter!!!!

wab95

but Nokia?s marketing prowess and mindshare outside the U.S. is substantial, and not to be dismissed

An important point. For low and middle income countries, where Nokia remain dominant, if Nokia switch to WinPhone7 and the relative price of smart vs commodity phones continues to shrink, that could open opportunities for the ultra-cheap handset sector from China and India making Android-enabled smartphones, assuming more people in these countries migrate to the smartphone.

Losing, even in part, its near stranglehold on low and middle income countries could really eat into Nokia’s market share dominance in units. I see this as one of Nokia’s biggest challenges on the near horizon.

This still does not get higher-end handset makers out of the woods in terms of making money on Android handsets; and by money, I mean enough to invest in R&D to make handsets that can exploit the OS and be competitive with the iPhone. Feasible, but that’s another discussion.

DavidEGo

The only entity that cares about market share is Microsoft because they want Windows to corner the market.  Thing is, they ride on the backs of Dell, HP, Acer, etc. who have such low margins that Microsoft makes more profit per pc sale than does either of the OEMs.

So market share is a nice statistic, but it doesn’t tell the tale of profitability or sustainability.

wab95

The only entity that cares about market share is Microsoft because they want Windows to corner the market

Not true. Google are now consistently citing the example of Microsoft vs the Mac in its bid for Android market share dominance over the iPhone. However the message is mixed, in that they cite Microsoft’s OS dominance as a model for Android, and in the same breath, speak of the advantage of an ‘open’ system vs a closed system (Windows is definitely closed and proprietary), and how this will trump the ‘closed’ iOS iPhone.

What the two (Google and Microsoft) have in common in the licensing to OEMs. This is the shared strategy. The ‘open’ vs ‘closed’ debate is less clear, especially as Google begin to exert more control over its Android OS.

Greater market share will definitely benefit Google. The benefits to the handset makers, again, is more uncertain, particularly if they fall into the pattern of the race to the bottom that has decimated profit margins in the PC world.

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