Apple takes 48% of the Mobile Profit Pie

An industry analysis organization called Asymco recently collected a bunch of information in order to correctly determine the current makeup of the mobile market. In the end, Apple stood out as the market leader with 48% of the worldwide earnings for the mobile market. Apple was able to achieve this feat with roughly 3 percent of the overall mobile sales for the quarter, which further emphasized its traditional approach of profitability over units sold. Analysts from Asymco believed that the disruptive profit shift in the industry was mainly due to a lack of viable response from the current handset makers three years ago.

While the mobile market is growing, particularly in the smartphone sector, the overall effect since Apple’s 2007 iPhone introduction is a redistribution of wealth. Overall handset sales in the second quarter of 2007 accounted for $28 billion, while sales in the same quarter of this year were only up 12 percent to $32 billion.

The situation appears challenging for those that sell lower-end devices with small profit margins. Nokia being the seller of the most handsets overall is an excellent example, as the bulk of its devices don’t bring large amounts of profits relative to the number of sales. To illustrate, Apple enjoys six times the revenue when compared to the average Nokia device due to the average selling price: $600 for an Apple handsets vs. a sub-$100 average selling price for Nokia devices. But the big picture isn’t just Apple taking on Nokia. Handset makers embracing Google Android are earning money, while Research In Motion is also faltering. Without additional disruptions from those on the downslope within the next few years, the entire mobile market could look vastly different from that of 2007.

Even as it still takes in a large share of industry profits, RIM is attempting to fight off declining market share with a new operating system and flagship device, but it doesn’t look like enough of a disruption. Early sales estimates of 150,000 devices along with online half-priced deals less than a week after the Torch’s debut indicate that RIM needs further disruption to maintain the same level of relevance it has enjoyed for several years.

As RIM has attempted to add consumer features to a highly capable enterprise device, Apple and Google have methodically added enterprise features to popular consumer devices. Support for Microsoft Exchange, remote data wipes, and improved security features have found their way into the iOS and Android platforms, giving enterprise customers an alternative to the traditional BlackBerry workhorses. Instead of a top-down feature approach, the current profit-makers have taken a bottom-up focus by building upon a stellar base experience.

Is there time for a Nokia, RIM or even a Microsoft to jump-start profits in light of the current Apple and Google movement? Of course there is, but the window of opportunity closes more each day with every high-profit device that doesn’t enjoy a large number of sales.

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