Apple Snags 48% of Mobile Profit Pie

Apple (s aapl) raked in 48 percent of the worldwide mobile market’s earnings before interest and taxes in the second quarter of 2010, mocking the relevance of market share figures, where it’s still a relatively small player. The Cupertino-based company achieved this feat with roughly 3 percent of the overall mobile sales in the quarter, further emphasizing its traditional approach of profitability over units sold. Asymco, an industry analysis organization that collated the data from over 500 data points, believes this disruptive profit shift in the industry is mainly because of a lack of viable response from the incumbent handset makers three years ago.

While the mobile market is growing, particularly in the smartphone sector, the overall effect since Apple’s 2007 iPhone introduction is a redistribution of wealth. Overall handset sales in the second quarter of 2007 accounted for $28 billion, says Asymco, while sales in the same quarter of this year were only up 12 percent to $32 billion. But far more of those recent sales dollars went into Apple’s coffers at the expense of Nokia (s nok), Motorola (s mot), LG and others. Such revenue erosion can’t continue in the long-term for a company to remain a key player in the industry.

Source: Asymco

The situation appears challenging for those that sell lower-end devices with small profit margins. Nokia being the seller of the most handsets overall is an excellent example, as the bulk of its devices don’t bring large amounts of profits relative to the number of sales. To illustrate, Apple enjoys six times the revenue when compared to the average Nokia device due to the average selling price: $600 for an Apple handsets vs. a sub-$100 average selling price for  Nokia devices. But the big picture isn’t just Apple taking on Nokia. Handset makers embracing Google Android (s goog) are earning money, while Research In Motion (s rimm) is also faltering. Without additional disruptions from those on the downslope within the next few years, the entire mobile market could look vastly different from that of 2007.

Even as it still takes in a large share of industry profits, RIM is attempting to fight off declining market share with a new operating system and flagship device, but it doesn’t look like enough of a disruption. My hands-on with the BlackBerry Torch shows an underpowered handset that tries to bring some appealing new features — such as a touch screen, WebKit browser and social networking integration — without getting away from the core competency of a traditional BlackBerry. Early sales estimates of 150,000 devices along with online half-priced deals less than a week after the Torch’s debut indicate that RIM needs further disruption to maintain the same level of relevance it has enjoyed for several years. It’s a war on two fronts, however.

As RIM has attempted to add consumer features to a highly capable enterprise device, Apple and Google have methodically added enterprise features to popular consumer devices. Support for Microsoft Exchange (s msft), remote data wipes, and improved security features have found their way into the iOS and Android platforms, giving enterprise customers an alternative to the traditional BlackBerry workhorses. Instead of a top-down feature approach, the current profit-makers have taken a bottom-up focus by building upon a stellar base experience.

Is there time for a Nokia, RIM or even a Microsoft to jump-start profits in light of the current Apple and Google movement? Of course there is, but the window of opportunity closes more each day with every high-profit device that doesn’t enjoy a large number of sales. Put another way: The number of at-bats in this ball game are fast decreasing.

Perhaps it’s even worse for those without their own platform;  Asymco postulates that Android isn’t more than a temporary designated hitter due to licensing the operating system to any hardware maker that wants to use it. Short of spending time, effort and money on ways to differentiate various Android handsets, those that use it may find no inclination to develop a better platform and ecosystem. Even worse: They’re more likely to attempt and fail against the incumbents, pending more disruptive technology. Against such odds, which company will step to the plate and swing for a bigger piece of the profit pie?

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