Apple now bigger than Nokia in mobile biz

By Jonny Evans

We're still reeling at Apple's [AAPL] latest record-breaking quarter, and in comes yet more good news for Cupertino executives -- Apple is now bigger than Nokia, at least in wholesale revenue terms, even while we wait for iPhone 5, possibly in September.

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The world's biggest smartphone and tablet vendor

Strategy Analytics this morning made the claim, saying:

"In wholesale revenue terms, we estimate Apple was the world's largest handset vendor in Q1 2011, overtaking Nokia for the first time. Apple is now the world's largest handset, smartphone and tablet vendor."

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This really isn't so bad when you consider the iPhone only revealed itself in January 2007; and that the iPad was a rumor until just last year.

The analyst firm points out:

"The term "handset" refers to the aggregated total market of smartphones, feature phones and basic phones combined. For example, Nokia shipped 108.5 million handsets worldwide in Q1 2011."

Apple is revenue leader

The firm estimates Apple's wholesale revenues for its iPhone division came in at $11.9 billion in Q1 2011. Nokia recorded $9.4 billion revenue in that period.

"With strong volumes and high wholesale prices, the PC vendor has successfully captured revenue leadership of the total handset market in less than four years," said Alex Spektor, Senior Analyst at Strategy Analytics.

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This could be an historical blip.

Neil Mawston, director at Strategy Analytics in a press statement said: "Apple’s proprietary ecosystem of hardware, software and services has proven wildly popular and hugely profitable. However, rivals are chasing hard, particularly the Android vendor community, whose global installed base of smartphones we estimate will exceed that of Apple’s by the end of 2011. Nokia is also investing heavily with Microsoft and Apple will be a key target for them next year."

We know the fragmented Android market continues to threaten Apple's leadership position, and the Nokia/Microsoft alliance also promises interesting new threats.

Now, in my opinion that's likely to translate into a never-ending conflict between Microsoft/Nokia on the one hand and Android/Google/others on the other, with Apple standing aloof from committing to that field. That's because the two former groups hold similar business plans, while Apple's is -- appropriately enough -- right on the money.

How many cylinders does Apple have? 

The Strategy Analytics findings are intriguing when considered beside some of Apple's financial performance metrics revealed by the company last night.

  • "With quarterly revenue growth of 83 percent and profit growth of 95 percent, we’re firing on all cylinders," said Steve Jobs, Apple’s CEO (who, we learned, wants to get back to full time work 'as soon as possible'). "We will continue to innovate on all fronts throughout the remainder of the year," he added.
  • All cylinders, indeed, Apple posted a new record second quarter revenue of $24.67 billion and record second quarter net profit of $5.99 billion. This is near double its performance last year ($13.50 billion and net quarterly profit of $3.07 billion).
  • Apple sold 3.76 million Macs during the quarter, a 28 percent unit increase over the year-ago quarter -- while the PC industry as a whole declined.
  • It sold 18.65 million iPhones -- up 113 percent and confirming a pent-up demand on the Verizon network.
  • Apple sold 4.69 million iPads -- it could have sold more, but production problems clearly slowed manufacture, though Apple was careful to stress its loyalty to members of its Japan component supply chain.

Today, Apple is the world's dominant mobile firm. How many cylinders does it have? We'll probably see some more when the company, you know, re-invents TV, perhaps in the current quarter as North Carolina goes online...

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Copyright © 2011 IDG Communications, Inc.

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