With 4S Now Tops Among Big 3, Apple Grabs 52% Of Industry Profits; Doles Out Huge Bonuses

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Daily Crunch: Drop In

As you’ve likely heard, there’s been a lot of upside that’s been reported of late when it comes to Android’s mobile OS. Thanks to Nielsen, we know that, yet again, Android is leader among mobile OSes, now accounting for 43 percent of U.S. smartphone marketshare, up from 39 percent in July; while Apple’s iOS remained at 28 percent over the same period, placing it in distant second.

Of course, Apple has a little bit of vertical integration going on, and in spite of their lagging well behind Google in mobile software market share, iPhones are used by a full 28 percent of smartphone customers, making them top manufacturer for yet another quarter. Hardware leans significantly in Apple’s favor.

So, while the iPhone made up a relatively small 4.2 percent of the mobile handsets shipped in Q3 2011, it seems that Apple is now accounting for over half of the industry’s profits. Yep. According to Canaccord Genuity analyst Mike Walkley, of the top eight cell phone vendors across the globe, Apple owns over 52 percent of the total operating income. And while that may seem impressive, that number is down from 57 percent in the second quarter.

In comparison, Samsung owns 29 percent of profits among the top vendors, up from 18 percent last quarter, while HTC accounts for 9 percent, RIM comes in at 7 percent, with Nokia at 4 percent. Though Apple’s 52 percent share of the operating profits of the top eight vendors is impressive in spite of the relatively small percentage of iPhones shipped, Samsung’s meteoric rise is certainly worthy of note.

According to Walkley, Samsung gained 11 points of value share thanks largely in part to the Android Galaxy S II, while RIM and Nokia continued to slip. Of course, while most groan over RIM’s future, at least Nokia is making a play at Windows Phone, hoping that its play into the U.S. market can turn a sinking ship around.

That being said, the analyst (and firm) found that Apple’s new iPhone 4S was the top selling phone for AT&T, Sprint, and Verizon (the three largest carriers in the U.S.), with the iPhone 4 — in spite of its next-in-line now being sold — remaining a top selling model for each of those carriers. As 9to5Mac says, the phones get older, the margins seem to get better. And with the popularity of these phones increasing, Walkley projects that Apple may ship as many as 29 million iPhone handsets in Q4 2011.

And that’s not all, as this succession of SEC filings shows, Apple’s executives are now reaping the rewards of a strong fiscal year (in which the company passed the $100 billion mark in revenue). The company awarded 1 million shares of stock to seven top execs, which will see bloated wallets for those of that remain with the company through 2016. The recently promoted SVP of Internet Software and Services Eddy Cue received 100,000 shares of stock in the form of a restricted stock units. 25 percent of Cue’s shares turn into freely tradable stock in September 2014, with the remainder vesting in September 2016.

Each of the remaining six executives received 150,000 shares of restricted stock, with 50 percent vesting in June of 2013 and the remainder vesting in March of 2016. Based on the current price of Apple stock, that works out to a payday of approximately $60 million each for the execs who received the 150,000 shares. (Which includes: Scott Forstall, Senior Vice President, iOS Software, Bob Mansfield, Senior Vice President, Hardware Engineering, Peter Oppenheimer, Senior Vice President and CFO, Phil Schiller, Senior Vice President, Worldwide Product Marketing, Bruce Sewell, Senior Vice President and General Counsel, and Jeff Williams, Senior Vice President, Operations.)

While Apple’s new CEO Tim Cook wasn’t mentioned in these new filings, he was awarded 1 million shares of stock upon his appointment as CEO, with 50 percent vesting in August 2016 and the remainder vesting in August 2021 (should Cook remain an employee of Apple).

So, while Google continues to rise in mobile software, it seems that thanks to Apple’s hardware and its dominance around the world thanks to the iPhone 4 (and now the 4S), both Apple and its executives are cashing in.

Thanks to Alistair Israel for the image