With a meager 1% total market share, Apple's profits managed to soar above Nokia's, estimated at about $1.6 billion for the same quarter. All of that money is sourced from the iPhone, which has positioned Apple as the most profitable mobile manufacturer in the world right now, Nokia coming in second. Part of Apple's profit is cited as coming from high volume sales and high wholesale prices, along with "tight cost control". Given the figures, it's easy to see that Apple is making a good chunk of change with every iPhone sold.
Though Apple's total market share remains low, they have a strong position in the niche of the smartphone market, where they ended up third in terms of growth -- RIM was first. With Nokia, Apple and RIM having strong success in the smartphone market, competitors like Motorola, Palm, Google, and the Open Handset Alliance are under a lot of pressure.