Apple increases share of overall mobile phone profits to amazing 75%

Despite trailing Android in mobile OS market share, iPhone generates huge profits, revenue

Sales of its iPhone may have comprised only 9% of the total mobile phone sales (not just smartphones) in the fourth quarter, but when it comes to the all-important bottom line, Apple is dominating its mobile phone rivals more than ever.

According to data from market intelligence analyst Asymco, the iPhone generated 75% of all mobile phone profits in the fourth quarter. That's right, Apple pulled down three-quarters of the $15 billion in estimated profits for the entire mobile phone industry in Q4.

That's up from 66% of all mobile phone profits in the second quarter of 2011, and 56% in the third quarter.

Samsung ran a distant second to Apple in Q4 mobile phone profits with 16% of the total.

Which leaves 9% for the rest of the market, with Research in Motion scrounging only 3.7% of total mobile phone profits, HTC 3.0% and Nokia only 1.8%.

Apple accomplished this despite generating "only" 39% of total mobile phone revenue in the fourth quarter, versus 25% for Samsung, 12.6% for Nokia, 8% for RIM, 5.5% for HTC, 4% for Motorola, 3.3% for LG and 2.7% for Ericsson.

Clearly some of Apple's competitors are going to have to increase their share of mobile phone profits and/or revenue in order to survive. Market's tend not to support a great number of bottom-feeders, and right now the mobile phone space is full of them.

But Apple has essentially eliminated meaningful competition at the high end of the mobile phone market, at least in terms of product profitability. Sure, more phones running on Google's Android OS get sold than iPhones, but clearly the margins are low.

This affords Apple a tremendous advantage against its competitors because greater profits mean more money for marketing and R&D. Not to mention, if Apple wanted to lower its iPhone prices as a competitive maneuver, it could do so and still ensure a healthy profit.

ITWorld DealPost: The best in tech deals and discounts.
Shop Tech Products at Amazon