Nokia ships 10x more devices than Apple, reaps 1/2 the profit
I used to be one of those iPhone skeptics adept at finding statistics showing how Apple's sales hadn't lived up to the hype (believe me, there were plenty of them). A classic was this blog I wrote two years ago for Computerworld, entitled, "Key overlooked stats about the iPhone (reality distortion field still works)."
Hard to believe now, but as recently as the first quarter of 2008, Windows Mobile phones actually outsold iPhones by 125% (3.86 million versus 1.72 million), according to Gartner.
Moreover, Nokia's smartphones outsold the iPhone by 8.4 times. The Finnish company sold 14.5 million smartphones that quarter. And remember, that was only a fraction of their total mobile phone sales (which totaled 115.5 million that quarter, see PDF).
Well, Nokia just reported their earnings today. While they remain the overall mobile device market leader by far, the numbers are far from rosy (a principal reason why the company is reportedly looking for a new CEO).
Here are some telling statistics:
- Nokia sold 111 million mobile phones and devices, including 24 million smartphones and misc. devices (tablets and netbooks). That brought in 6.8 billion Euros (US$8.7 billion) in revenue, and 647 million Euros (US$828.2 million).
- Apple sold 8.4 million iPhones and 3.27 million iPads, for a total of 11.67 million devices. That brought in $7.5 billion in revenue. Apple did not break out net profits by product, but let's use a conservative estimate of a net profit margin of 21% based on its overall net profits divided by revenue for the quarter. By that estimate, device sales reaped $1.55 billion in profit.
(Remember, we're not including iPods, which are wireless mobile devices but lack voice capability...this may seem contradictory, since the iPad is technically not a voice device but gets it the same way the iPod does, through add-on VoIP software such as Skype. But humor us).
Based on that:
- Nokia outsold Apple almost 10x.
- But Nokia only brought in 16% more revenue.
- Worse, Nokia probably only generated about half of Apple's profits.
- That's not surprising: Nokia's operating profit margin was 9.5%, down from 21.2% in Q1 2008, when I had earlier compared the two companies and found Nokia still trouncing Apple.
- Also, Nokia's shipments are down 4% from where they were 27 months ago. While Apple's are up 678%.
These stats would be even more lopsided if a) I included the 9.4 million iPods sold by Apple last quarter; b) the portion of the $1 billion iTunes revenues from the iPhone and the iPad.
It's getting hard to argue against the hype, now.