Apple Overtakes Nokia As No. 1 Handset Vendor

Why should we care? Well, because it means good design and innovative reconfiguration of existing hardware is beneficial for business. This is because it attracts attention and people may even be willing to pay a premium for it if they perceive that it imprives their lives through enhanced functionality. That the product association may even improve their own image is an added intangible attribute. It also means that the global emphasis on quality is not chimerical; it is here to stay. The question Apple's ascension raises is whether anyone else, currently laboring in obscurity in China, Brazil, India or Lithuania, for that matter, may be about to invent the disruptive innovation that supplants the iPhone. Yukari Iwatani Kane reports in the Wall Street Journal:

"Apple wowed Wall Street when it reported that it shipped more iPhones in the March quarter than during the holidays and more than twice as many as a year earlier. Now research firms are making their own calculations of how those results shift the industry landscape.

Bloomberg NewsStrategy Analytics said that the latest numbers indicate that Apple has now overtaken Nokia to become the world’s largest handset vendor in terms of revenue, in addition to already being the largest smartphone company. The Boston, Mass., company said it estimates Apple’s wholesale revenues for its iPhone division to be about $11.9 billion in the first quarter of 2011, compared with Nokia’s $9.4 billion.

“The PC vendor has successfully captured revenue leadership of the total handset market in less than four years,” Strategy Analytics said in a press release.

That may come as little surprise, given that the Cupertino, Calif.-based Apple said it shipped 18.7 million iPhone units during the January to March period, up 113% from last year’s 8.8 million units.

Apple didn’t provide its average selling price to operators, citing competitive reasons, but according to Strategy Analytics’ calculations, Apple sold its iPhones for $638 each on average (customers get it cheaper because operators subsidize the cost in exchange for a contract), compared to Nokia’s $87 and more than in the previous December holiday quarter when Apple said it sold its iPhones for $625 each on average.

Even in terms of units, Apple is gaining. Research firm IDC said it believes Apple increased its market share in the smartphone market to 18% in the quarter, two percentage points higher than last year’s share of 16%. IDC said that the iPhone has been growing at a compound annual growth rate of 32% since its launch in 2007.