Apple Inc.’s iPhone nabbed more than half of the phone industry’s profits despite yielding a low overall market share according to an analyst report.

T. Michael Walkley, an analyst with Canaccord Genuity, this week said the iPhone captured 52 percent of the handset industry’s operating profit in the third quarter with only a 4.2 percent market share.

Walkley estimates the iPhone could subsequently take 60 percent of phone market profits, adding iPhone sales could reach 29 million in the Dec. quarter and 104.4 million in fiscal year 2012.

Apple in Oct. said it sold 4 million iPhone 4S units at launch in the first three days of sale to set a new sales record for the device.

The company in Oct. reported it sold 17.07 million iPhones in Q4, below the 20 million units estimated by analysts, which concluded buyers held out for the release of the iPhone 4S.

Fourth quarter profit increased to $6.62 billion to increase from $4.31 billion, a 54 percent increase from one year prior.

The iPhone 4S includes the A5 Dual-Core CPU, 8MP camera, 1080p HD video recording functionality, iOS 5, and a new voice command protocol called Suri starting at $199.99 after contract.

The iPhone utilizes the iOS operating system used in iPod Touch and iPad 2 products.

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