Linked by Thom Holwerda on Fri 29th Jan 2010 22:42 UTC
PDAs, Cellphones, Wireless During the iPad presentation, I was rather perplexed by Apple's claim to be the largest mobile device company in the world. Apparently, I wasn't the only one scratching his head, as Nokia itself, and even the Financial Times, is calling Apple out on its juggling with figures and definitions.
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how you define it
by TechGeek on Sat 30th Jan 2010 04:01 UTC
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It really comes down to how you define things. First, Nokia has sold more devices. So in that regard, Nokia is bigger. Apple is making more money, but how much of the money is from software/media or non mobile devices? So Nokia could actually be making more from hardware than Apple. Lastly, we have hard assets. Stock doesn't really mean crap as it could crash tomorrow and be worth nothing. Hard cash on hand is in Apple's favor. However, Nokia owns patents on most of the wireless tech in existence. And when the court case is over, Apple is eventually going to have to pay up for ALL the phones it has sold with a license. Remember, Apple can only buy Nokia if they can get more than 50% of the stock. If current owners refuse to sell, Apple can't buy it. Plus, a merger would be shot down by the FTC as it would create a monopoly.

Reply Score: 4

RE: how you define it
by JonathanBThompson on Sat 30th Jan 2010 04:09 in reply to "how you define it"
JonathanBThompson Member since:

Well, that's an interesting statement:

What monopoly would be created?

While Nokia sells lots of cell phones by pure volume, they are far from a monopoly in cell phones, period: there are many meaningful competitors, and most of their phones are the rather low-end inexpensive ones: the ones that will sell far more due to being affordable for a larger population.

Apple sells a decent number of iPhones, but they are hardly the largest seller of those, at least not nearly enough to be a monopoly of smart phones, of which Nokia also isn't nearly close enough in this end of the market.

Sure, Apple makes computers and iPods and the Apple TV and a certain amount of software, but Apple's share of the computer market, the OS market, and living room market in the form of Apple TV isn't remotely close to achieving anything close to a monopoly in any of those areas, even if added to what Nokia makes: there's no potential for monopoly even if you merged them.

All that being said: Nokia is a low-margin company, compared to Apple, and Apple simply isn't interested in such a business model. If Apple were to acquire Nokia, it seems most logical they'd divest of most of the low-end products to whomever had the money to buy it off them, and do the whole thing purely for the sake of owning patents that won't cause issues. But, really: are those patents worth THAT much long-term? A lot of them are becoming dubious in value as 4G comes online anyway.

Reply Parent Score: 2

RE[2]: how you define it
by siimo on Sat 30th Jan 2010 04:22 in reply to "RE: how you define it"
siimo Member since:

Nokia has some 4G patents, although not a leader

Reply Parent Score: 3

RE[2]: how you define it
by TechGeek on Sun 31st Jan 2010 18:17 in reply to "RE: how you define it"
TechGeek Member since:

I think Apple buying Nokia would create a monopoly in the smart phone business. I could be wrong, but I can't see the EU or the FTC allowing it. Its better by far for the consumer to have them competing. As for a buy out, it would really depend on who owns 51% of Nokia. A hostile takeover only works if you can actually get 51% of the stock. It would be like trying to buy out MIcrosoft. Bill Gates still owns 51% so he is THE deciding vote.

Reply Parent Score: 2

RE: how you define it
by fatjoe on Sun 31st Jan 2010 19:14 in reply to "how you define it"
fatjoe Member since:

There are two things I want to say about that. First, from what I have seen this week, Nokia makes more money that Apple.

Second, Apple has much higher margins. But if you look at this from another angle (the consumer angle), this means that compared to Nokia, Apple overcharges its product. Of course, you could turn this around and say people are happy to pay more for Apple products because they have higher quality, but remember that Apple products, specially their computer products, contain the exactly same components as anyone elses. And their products break as often as anyone else [in fact, Sony, Toshiba and ASUS are better according to a report we saw a few months back].

So Apple fans are basically defending Apple for selling them overpriced stuff, and they are proud of it...

Reply Parent Score: 2