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Nokia ships 10x more devices than Apple, reaps 1/2 the profit

By Eric Lai | July 22, 2010, 5:24pm PDT

Summary: A quick look at Nokia and Apple’s sales stats for the most recent quarter show Nokia selling way more devices - and reaping a lot less 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.

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Topics

Nokia Corp., Apple Inc., Market Share, SmartPhones, Consumer Electronics, Personal Technology, Eric Lai, Tablets, Profits

Eric Lai tracks the latest news and trends in enterprise mobility.

Biography

Eric Lai

Eric Lai tracks the latest news and trends in enterprise mobility. A veteran tech journalist most recently covering enterprise software for Computerworld, Eric joined Sybase, an SAP company in April 2010. Eric's views are his alone and do not necessarily represent those of SAP. This blog is sponsored by SAP.

Talkback Most Recent of 6 Talkback(s)

  • RE: Nokia ships 10x more devices than Apple, reaps 1/2 the profit
    Of course, Apple has those excellent numbers, they?re selling to you a $200 device for >$600 (included in your expensive data plan). Nokia?s had a tough time not with customers worldwide but with shareholders who desperately want big money. Nokia is by far the smartphone leader around the globe but they?ve had to sacrifice their profit margins because their customers are low to mid income. Apple certainly dominates US market but a complete world exists out of US borders. The US market is peculiar, Americans like shiny interfaces and lots of unnecessary apps. IMO, Nokia has lost the US, they should consolidate its presence in Europe and focus in emerging markets like China and Latin America.
    ZDNet Gravatar
    xtremesv
    23rd Jul 2010
  • RE: Nokia ships 10x more devices than Apple, reaps 1/2 the profit
    @xtremesv Not a bad idea; take the Wal-mart strategy of unabashedly targeting the low-medium-end and volume. This would require, however, that Nokia to be a wizard on manufacturing and supply-chain issues - not sure they are, or if any non-Asian-based company could be. Also, many mobile users in China and other third world markets are more sophisticated and demanding, b/c the infrastructure is better than the US and b/c they rely more heavily on their smartphones. So this is not as straightforward a strategy as it might seem for Nokia, I fear.
    ZDNet Gravatar
    ericylai@...
    23rd Jul 2010
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    23rd Sep
  • RE: Nokia ships 10x more devices than Apple, reaps 1/2 the profit
    Nokia needs to do a couple of things:
    1) Get the N8 out the door and get some reviewers to look at it objectively (i.e. across the complete spectrum of what it can do).
    2) Get MeeGo functioning as a top of the line Smartphone platform THAT INCLUDES PERIODIC OS UPDATES ! The fact that Nokia has failed to offer REAL updates (not just fixes) to it's higher end Smartphone platform is frustrating previous owners.
    3) Keep plugging away. China and India (Each over 1 Billion People) are starting to have increased populations of people with more and more expendable income. In the past, Indian residents primarily bought basic phones (not Smartphones), this will probably change significantly and when it does, Nokia will be comfortable to them.
    ZDNet Gravatar
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    29th Jul 2010
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Blogger Biography

Eric Lai tracks the latest news and trends in enterprise mobility. A veteran tech journalist most recently covering enterprise software for Computerworld, Eric joined Sybase in April 2010. Follow him at ericylai@twitter. Eric's views are his alone and do not necessarily represent those of Sybase.

This blog is sponsored by Sybase.

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