Apple Tops Phone Market in Total Revenue: Report

Apple passed Nokia during the first quarter to become the world's largest vendor of mobile phones in terms of revenue, according to a Thursday report.

The reason, according to Strategy Analytics, is the average selling price that Apple can sell its phones at: $638, or 7.3 times the average price of Nokia, which placed second in SA's mobile-phone revenue rankings.

Apple, which reported record results for its fiscal second quarter, saw iPhone sales more than double compared to a year ago, the foundation upon which it built its quarter, as expected. Apple executives declined to comment on the average selling price of its phones, which traditionally are priced as premium phones, even after carriers pay subsidies to bring the price down.

Apple also reported record revenues from its iTunes app store, reporting $1.4 billion in revenue from sales of music, videos, apps, and books.

"Apple clearly hit a home run in iPhones, which helped people forget about the shortfall in iPads," said Bill Kreher, a technology analyst at Edward Jones, in a Thursday interview.

According to Strategy Analytics, Apple sold 18.6 million handsets in the first quarter of 2011, at an average price of $638. The ASP slightly increased from $606 the year before, when Apple sold 8.8 million iPhones.

Nokia, meanwhile, sold 108.5 million handsets for the first quarter of 2011, versus 107.8 million for the first quarter of 2010. ASPs also remained roughly flat, growing slightly from $83 to $87 for the two periods, SA found.

"In revenue terms, Apple is now the world's largest handset vendor, smartphone vendor and tablet vendor," said Neil Mawston, director at Strategy Analytics, in a statement. "Apple's proprietary ecosystem of hardware, software and services has proven wildly popular and hugely profitable. However, rivals are chasing hard, particularly the Android vendor community, whose global installed base of smartphones we estimate will exceed that of Apple's by the end of 2011. Nokia is also investing heavily with Microsoft and Apple will be a key target for them next year."

On Feb. 10, Apple began selling the Verizon-branded iPhone 4, and Verizon chief executive Daniel Mead already went on record claiming that Verizon sold more iPhone 4s during its initial launch than any other phone in the carrier's history. That's fueled speculation that a iPhone 5 may be delayed due to the high iPhone 4 demand .

During the fourth quarter, Apple executives implied that Apple could still not meet demand for the iPhone. By contrast, Apple was able to make a "significant increase in capacity" and get a "much-needed supply to channel partners," putting supply and demand in equilibrium for the iPhone as well as the Macintosh. Hitting 18.65 million iPhone sales was something that Apple didn't think it could do, said Tim Cook, Apple's chief operating officer, during its conference call Wednesday with Wall Street analysts.

Cook also implied that an iPhone based on the LTE technology used by Verizon's HTC Thunderbolt was due any time soon.

"I was asked this question or a similar question when we launched the iPhone with Verizon," Cook said. "What I said then and what I see this is the case today, and I think you can see this in the products that have been shipped, is that the first generation of LTE chipsets forced a lot of design compromises with the handset, and some of those we are just not willing to make, and so we are extremely happy with the iPhone 4 and the iPhone 3Gs."