Apple Takes Bite Out Of Nokia Profit

CUPERTINO, Calif. (TheStreet -- Apple(AAPL Quote) has overtaken Nokia(NOK Quote) as the world's most profitable handset maker, according to research released Wednesday.

The Finnish handset giant slipped into second place during the third quarter, according to the Strategy Analytics report, as Nokia felt the impact of a tough economy and a stagnant U.S. presence.

"Nokia's profit margin for its handset division has been shrinking during the 2009 global economic downturn," said Neil Mawston, director of Strategy Analytics' Wireless research division, in a statement.

Strategy Analytics estimates that iPhone-maker Apple's operating profit was $1.6 billion during the third quarter, compared to Nokia's $1.1 billion.

"Apple overtook Nokia for the first time," added Alex Spektor, an analyst at Strategy Analytics. "With strong volumes, high wholesale prices and tight cost controls, the PC vendor has successfully broken into the mobile phone market in just two years."

The U.S. is nonetheless key to Nokia's efforts to revitalize its business, according to the research firm. "A successful fight on Apple's high-profit home turf can simultaneously help to revitalize Nokia's margins and to put a check on Apple's surging growth," explained Mawston.

Strategy Analytics' research, however, comes just days after IDC reported that Nokia shipped the most smartphones during the third quarter, followed by BlackBerry-maker Research In Motion(RIMM Quote) and Apple.

IDC also found that handsets based on Google's(GOOG Quote) Android operating system, which are sold by HTC, Samsung, Sony Ericsson and Motorola(MOT Quote), are generating plenty of buzz. Most recently, Motorola unleashed its Droid phone, which is based on the Android OS.