I Saw This Coming: Feature Phones Now More Profitable Than Smartphones

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It was recently that I asked here on Mobility blog the question, for how much longer shall the smartphone market remain this profitable?

Many respondents were of the opinion that the smartphone market would yield greater returns for a long time. I deliberately kept quiet though I disagreed with that general flow of thought.

Well, we have it on good authority from Forbes that the feature phone market is now more profitable than the smartphone market. Here is how the Forbes article opens the subject:

For many handset vendors, the world has turned upside down. Nokia‘s $40 feature phones are vastly more profitable than Sony Ericsson‘s $200 Android models. This is not how the smartphone revolution was supposed to turn out.

Well, that didn’t take long! Just about four weeks after my article.

Yes; the feature phone market is shrinking, but also consider that there are now very, very few feature phone manufacturers (almost everyone has abandoned that field for smartphones), and your guess is as good as mine who are benefiting from this shift.


Most people will agree with the Forbes article that this is not how the smartphone revolution was supposed to turn out. Not me. I saw this coming.

Read the full Forbes article

  1. Did you see the article about Nokia’s billionth S40 bought? It was bought by someone in 8razil.

    While the West looks at tablets and smartphones and ultra portable notebooks, users in the developing world and emerging markets continue to buy feature phones more than smartphones.

    As I’ve said elsewhere on the site, even when Blackberrys and Nokias aren’t doing well in Europe and North America, they’re still selling in Africa and Asia. Wonder if Forbes mentioned that?

  2. I was NEVER part of the general flow here.

    Let them speak now, they that strangly believe that volume of sales does not count against lean sales 6 pieces of a 40 dollar nokia phone compare to 1 200 dollar sonyerricsion smartphone.

    Africa and middle east will help drive this truth home.

  3. I am not sure what to make of this post and the referenced Forbes report.

    Profitability is a function of (unit sales, and the profit per unit). Which is more important is anybody’s guess!

    Are we saying that a company like Nokia is selling more midtier phones than other companies ssay Samsung) sell higher_end smartphones?

    Is it not the case that competition is driving unitprices of smartphones down, prompting more people to buy more?

    Some clarification would be in order!

  4. I’d take time to read the Forbes article and make further comments later. But Eye.Bee.Kay mentioned a pertinent observation there. Profit is equivalent to cost of device and actual amount of devices sold. The profit margin is higher in high end smartphones than feature phone or low end smartphones. Maybe they meant the sheer volume of feature phones sold would compensate for lower margins. Apple still holds the highest profit in the Tech world despite not embroiling in feature phone sales.

    I’d leave with a Proverb. The Chicken has no teeth and yet it eats grains and stones. If it has teeth, what will it eat? Let it ask the cow that has teeth but yet eats grass!

    My point? Despite Nokia selling its Billionth phone in Brazil, they still succeeded to do awfully poorly in the last quarter. They managed a 1.2 Billion Dollars loss! Apart from Apple, Samsung and LG, other major Device Manufacturers sustained losses in The last quarter. And what do Apple, Samsung and LG have in common? Smartphones and computers.

    And by the way, Nokia selling it’s billionth phone in Brazil is all gimmick. No one could actually say where the Billionth Nokia phone was actually sold. It could be London or Nigeria for instance and no one would know! For Chrissakes, phones are sold simultaneously all across the world!

  5. Obviously, this Forbes report is based on select data that appear to support the line of reasoning of the writer and make a generalized statement that could prove to be way of the mark the numbers start coming in from all the manufacturers.

    I know that Samsung, LG, Motorola and even Sony Ericsson were still producing feature phones last year, though maybe not in great numbers or variety as when compared to their smartphone line or to Nokia, so we should have heard that those companies also made more profit from their feature phone units.

  6. As a shareholder what am interested in is Profits.

    I don’t want to know if you sold billions all i need in ROI.

    But one truly need to give thumbs up to Nokia for all these feature phones.

  7. Mr Mobility, you cannot claim to have seen or prognosticated something you did NOT SPECIFICALLY see or prognosticate.
    Your referred-to article speculated a fall in smartphone profits, NOT a major rise in feature phone profits.
    Small distinction, big difference.

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