Apple becomes top phone maker by profits

By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) - Apple (AAPL.O) overtook Nokia (NOK1V.HE) in the third quarter as the cellphone maker generating the highest total operating profit in the industry, research firm Strategy Analytics said on Tuesday.

Apple, which entered the cellphone market only in mid-2007 with its iPhones, sold a record 7.4 million of them in the third quarter.

"With strong volumes, high wholesale prices and tight cost controls, the PC vendor has successfully broken into the mobile phone market in just two years," said Alex Spektor, analyst at Strategy Analytics.

Apple does not unveil profits per business line, but Strategy Analytics estimated Apple's operating profit for its iPhone handset unit stood at $1.6 billion (956 million pounds) in the third quarter, compared with Nokia's $1.1 billion.

Apple has said sales value of iPhones sold during the July-September quarter was $4.5 billion.

Nokia sold 108.5 million phones in total in the same quarter, generating sales of 6.9 billion euros ($10.36 billion) but its profits were hit by the economic downturn and a stagnant presence in the United States.

Nokia's global market share is still close to 40 percent, but in the United States its market share is well below 10 percent.

"We believe the United States, where Nokia now trails Apple in marketshare, is the key to Nokia's recovery in 2010," said analyst Neil Mawston.