Profit Share Over Market Share

In the mobile phone market there is almost no correlation between market share and share of the total profit. On one hand we have Nokia that has 45% market share and 59% share of total profit and on the other hand is Apple with 20%  profit share with less than 2% of market share. In the middle there is Sony Ericsson has 10% market share with almost no profit to show for.

Now both Nokia and SonyEricsson are  doing something about it:

Both companies aim for their coming launches to primarily boost profit margins rather than market share.

Nokia also hopes to boost its gross margin and profit by launching an increasing number of touch-screen and full-keyboard devices, Mr. Simonson told Dow Jones Newswires. He added that those efforts would be more important than gaining market share.

This is positively good sign and points to return to what the business should have always focused on – profits not market share.

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