Analyst: Apple Takes Over Half the Mobile Phone Industry Profits

AAPLApple’s iPhone accounts for more than half of the mobile phone industry’s profits, according to research from Canaccord Genuity analyst Michael Walkley. The lion’s share of profit’s the iPhone holds, however, comes with less than 5 percent of the world’s smartphone marketshare.

Apple generated a remarkable 52 percent share of estimated third quarter/calendar year 2011 handset industry operating profits among the top eight OEMs with only 4.2 percent global handset unit market share,” Mr. Walkley said.

He added that his research indicates the iPhone 4S was the top selling smartphone in October for AT&T, Verizon and Sprint. “As such,” he said, “we believe Apple’s Q1/F2012 will mark a record quarter for iPhone sales, and we are modeling unit sales to increase roughly 70 percent sequentially to 29 million.”

Apple first showed off the iPhone 4S during a special media event on October 4, and managed to sell over 4 million units during the first three days of availability in the U.S. and a handful of other countries. The company followed up its initial iPhone 4S rollout by adding 22 more countries to the list on October 14, and is adding 15 more countries on November 11.

Based on his new iPhone 4S sales estimates, Mr. Walkley is raising fiscal 2012 EPS estimate from US$33.10 up to $33.52, and bumping up his fiscal 2013 EPS estimate to $39.96 from $39.01.

Mr. Walkley is maintaining his “Buy” rating for Apple’s stock, but is raising his 12-month target value from $545 up to $550. Apple is currently trading at $400.24, down 2.83 (-0.70%).

[Updated to indicate Apple’s profit percentage was for the mobile phone market, not just smartphones.]