Back in October 2008, I wrote about a blog post of David Wood, who is part of the Symbian leadership team, where he said that while smartphones only account for 10-15% of sales units, the sales revenue is between 20-25% and profits may even exceed 40%. Now Moco News reported similar numbers being given by Deutsche Bank analyst Brian Modoff in an article in the Wall Street Journal.
His numbers are as follows:
- Apple and RIM together only have 3% of the mobile phone market share but make 35% of the total profits.
- Nokia manufactured 46% of the mobile phones sold last year (I heard 38% somewhere else) and made 55% of the profits. Note: It would have been interesting to see the split in profits between their smartphones and the rest of the phones they produce. Do they give these numbers in their quarterly reports?
That makes me wonder why there is so much profit in smartphones vs. the rest!? Granted, their price is much higher than that of ordinary phones and thus if the profit percentage is similar, the profit per device is also higher. However, that can't explain it all. Less competition then maybe? Also a bit doubtful as the smartphone market seems to be quite competitive with manufacturers like Nokia, Apple, RIM, HTC (G-phone, WinMob), etc. vying for market share. What do you think?