This was my post from another thread discussing these number:

OK I think I see where their 1.6 billion from iPhones comes from...

Apple sold something like 7.1 million hadnsets, they've assumed a profit margin from the reports of around 225 dollars per phone. That is a hugely high figure, and would exclude R&D, Marketing costs etc etc.

Nokia has revenue from handset sales of about 6.9 billion (euros -- about 10 billion US). They seem to have assumed Nokia average margin is 10 us dollars per handset, which is mentalism. If that was a like to like comparison, after R&D and sales costs Nokia would be making a huge loss on every phone sold!

For completeness, Nokias handset business posted a profit of around 850 million (US) (just took the bottom line and canceled out the losses from Nokia-Siemens for this rough figure). Their assumption then would be that all Nokias R&D and sales and marketing costs amount to about 300million to get their 1.1billion figure!

It's a nonsense comparison with made up numbers, essentially.

Nokias figures ARE bad (for them), but it's handset business's profit of 850 million compared with Apples profit of 1.6billion (across all it's markets) isn't so bad...

Emphasis mine. The numbers are anybody's guess, but until you bring it at least to the same time period, it will be hard to compare them

You're actually wrong and misunderstanding the profit numbers. I wrote in another thread where this came up and you were quoted:

Strategy Analytics was estimating Apple's operating profit on the iPhone for the September quarter. Whereas the profit Apple reported for the same quarter (and that you're citing) is its net profit.

So you're comparing apples and oranges. The operating profit is calculated before taxes and interest payments are deducted. The net profit includes the deduction of taxes and interest. Hence the net profit is a smaller number than the operating profit. Who knows what Apple's entire operating profit for the September quarter is, but it's much larger that 1.67 billion and whatever that larger number is would be the relevant number to compare to the operating profits for the iPhone alone.

Here's the Reuters story on Strategy Analytics announcement: http://tech.yahoo.com/news/nm/200911...us_apple_nokia. It came out of November 10. Apple announced it's net profits twenty days earlier on October, 19: http://www.apple.com/pr/library/2009/10/19results.html. So obviously Strategy Analytics knew what Apple's net profit announcement was. In fact, they needed Apple's September quarter results announcement, to get the figure for the number of iPhones sold and make their estimate in the first place. So they would have certainly caught any such gross error. Also, obviously any halfway decent news organization, like Reuters, would have caught such an error as well.

Here's the wikipedia article explaining net profits, for those who don't know what it is: http://en.wikipedia.org/wiki/Net_profit.

And here's the articles on operating profits: http://en.wikipedia.org/wiki/Operating_profit, also called EBIT (Earnings Before Interest and Taxes): http://en.wikipedia.org/wiki/Earning...rest_and_taxes.

When you create a device thats worth 200$ and sell it for 1000$ ... you still wonder about that?

Indeed! And I already have a good name for it: Pippin!

are you serious? what 5 out of 1000 people have a mac. i cant stand macs why would i want a apple gaming system. when they can make a mac good enough for gaming then bring this up.