Apple, RIM taking large chunk of cellphone profits

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Apple, RIM taking large chunk of cellphone profits

Despite accounting for only three percent of worldwide cellphone sales in 2008, Apple and BlackBerry maker Research In Motion accounted for a much larger percentage of profits—35% combined—according to Brian Modoff, an analyst with Deutsche Bank. The Wall Street Journal reports that Modoff expects an even wider discrepancy this year, with the rival smartphone makers accounting for five percent of sales but 58% of total operating profits. Modoff attributes the two companies’ profitability to their focus on smartphones, which tend to sell for higher prices an provide wider margins than traditional cellphones. Apple and RIM controlled roughly 32% of the smartphone market between them in the first quarter, according to IDC estimates.

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