Money for nothing
Apple and Research
In Motion make huge profits thanks to flogging gear with high profit margins
according to Deutsche Bank analyst Brian Modoff.
Modoff said the companies
only account for 3 per cent of the entire global wireless market, but earn
35 per cent of operating profits. He expects the companies to continue to
gobble up market share and increase their profits over the next few years
despite a dip in the overall mobile phone market.
Modoff said Nokia had
about 46 per cent of the global mobile market share but earned 55 per cent
of operating profits. The company is reliant on low-cost mobile phones for
emerging markets that don't have high margins.
Apple has been clever at
getting carriers to stump up $400 to subsidise each phone. Rim has been
exploiting its deep roots in the enterprise market with backend
infrastructure like the BlackBerry Enterprise Server.
Both really make huge
amounts of cash for each unit they sell and it is the telcos and ultimately
the consumer, that has been giving them it.