The Wall Street Journal's (subscription required) Brian Modoff, a Deutsche Bank analyst, has research that shows both Apple and Research In Motion together hold about 38% of the total profit of the cellphone industry in 2008, with only 3% for total unit sales (Apple has 2% of that, the rest is RIM).
The two companies' outsize share of profits underlines the shift in the wireless industry toward feature-rich devices accenting easy-to-use software and away from an emphasis on hardware. Smart phones account for only about 13% of total cellphone sales globally, but the segment is growing, despite a drop in the broader cellphone market. Apple and RIM had about 32% of the smart-phone market between them in the first quarter, estimates IDC.
For the year 2009, Modoff has predicted that both Apple and RIM will reach 5%combined, as well as rake in 58% of total industry profit.
Subsidies by the wireless carriers are a major reason behind these large profits for smartphones like the iPhone as well as the BlackBerry line. MacRumors states that Apple receives about $400 from carrier subsidy on each iPhone sold, RIM sees about $200, and the rest of the cell phone makers out there see about $100.
Nokia seems to be the dominant force (market leader) of basic cell phone models, and pulls in greater industry profits (55%) and unit market share (46%), but even Nokia is seeing a decline in numbers as more and more people flock to more sophisticated smartphones from other competitors.
