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iPhone Rakes in a Third of Industry Profit

Bernstein Research analyst Toni Sacconaghi has detemined that the iPhone accounted for a full 32 percent of mobile handset profit in the first half of the year.

That said, the iPhone only brought in about 8 percent of industry revenue, a far cry from No. 1 Nokia. In fact, Apple is in fifth place overall in the market.

The reasons for the discrepancy? “First mover” advantage in the advanced smartphone market and the App Store strategy, which has proven very profitable indeed.

“Even if we exclude the operating losses generated by Motorola and Sony Ericsson, Apple still accounted for 25 percent of industry profits,” said Sacconaghi in a client note.

He added, “iPhone’s success is akin to Apple’s position in the PC industry – where the company enjoys an estimated 25 percent of industry profits, despite capturing only six percent of industry revenues.”

Not a bad deal.


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