While Nokia still commands the worldwide market share, Apple has finally overtaken them in profits. At least, according to a report by Strategy Analytics. Things are not that clear, however.
According to Strategy Analytics, Apple made a $US1.6 billion profit in iPhone sales alone, while Nokia only made $US1.1 billion on whatever they are trying to pass as smartphones these days. However, Betanews’ Joe Wilcox was quick to point out that the $US1.6 billion profit was for all Apple sales:
the numbers don’t add up to Apple’s overall handset profitability exceeding Nokia’s during third quarter, unless someone is making the bold assumption that all, or nearly all, Apple profits came from iPhone. They surely do not. What? Apple made only $US700,000 on iPod, Macintosh, retail and software — $US1.6 billion — on iPhone. No way.
Sounds logical? Wrong! says John Gruber, grubbing in with one of his grubby-grubby arguments:
Perhaps if Wilcox had actually read more than just the first paragraph of Apple’s press release announcing the company’s earnings, he’d understand:
“Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures for the quarter are $US12.25 billion of “Adjusted Sales” and $US2.85 billion of “Adjusted Net Income.”
That’s where Gruber says the $US1.6 iPhone profit comes from. If you use non-GAAP accounting — which spreads the quarter’s income along the total projected life of the product — Apple wins hands down:
…it’s pretty safe to say that the iPhone accounts for nearly all of the difference between Apple’s GAAP and non-GAAP reported profit, which difference came to $US1.18 billion for the quarter […]take Strategy Analytics’s estimate of $US1.6 billion in profit, divide by 7.4 million iPhones, and you get $US216 in profit per iPhone, which, again, sounds like it’s in the ballpark.
The fact, however, is that nobody has a single clue about what Apple’s real numbers are: Wilcox, Gruber and Strategy Analytics are building their cases over a lot of assumptions. So I’m going to pull a King Solomon here, smack all of them and send them to the principal. [Cnet, Betanews, and Daring Fireball]