Samsung beat Apple in smartphone shipments amid positive results

The Hindu ^ | July 28, 2016

[TruthWillWin]

The Note 7 will take an SD card but will not have a removable battery.

[Dalberg-Acton]

I’ll have to go to a corporate ATT store and do a hands on comparison. Might still keep the S4. It’s a great phone.

[Swordmaker]

Article based on IDC's guesstimates that Samsung's total number of Android phones have outsold Apple's iPhones in the 2nd calendar quarter of 2016.

No, Samsung has not beaten Apple in Smartphone shipments. They beat Apple in shipping total number of cellular phones in all categories. Not all of the phones Samsung ships are smartphones. . . not by a long shot.

These IDC and Gartner reports ALWAYS assume that the other cellphone makers only manufacture smartphones and report all their output as smartphones. That assumption is completely WRONG! Apple is the only cellular phone maker that only manufacturer that only produces smartphones. All of the other Android makers either produce a mixture of phone products or, choosing not to compete in that market, do not even produce a smartphone at all.

In fact, fewer than 30% of the cell phone product mix that Samsung manufactures are smartphones according to their own testimony as revealed in 2014. In 2013, Samsung shipped 30% smartphones, 40% Feature phones, and another 30% basic phones. . . but they were all loaded with Android OS so they were reported as being "smartphones" in the numbers reported by IDC and Gartner.

Apple does not sell Feature or basic Phones. Many of the other Android makers do not even make smartphones, concentrating instead on Feature or basic phones that sell well in the third world where there is a lack of bandwidth for internet connections. The third world markets was where Samsung made the decision to concentrate efforts in 2014 and later to expand their business.

In May or June of 2014, Samsung actually announced at their stockholders' annual meeting that they were forced by market conditions and the financial situation to REDUCE their smartphones in their product mix to only 19%.

Whether they have increased that back to the 30% of the 2013 levels is unknown. However, if they have, the number of smartphones actually shipped (not Feature phones or basic phones) in the 2nd calendar quarter of 2016 assuming they HAD returned to that 30% level, would be only 23.1 million, compared to Apple's 44.9 million (40.4 million newly shipped plus 4.5 million sold from inventory during that same quarter as per last Tuesday's Financial conference call).

Ergo, Apple sold almost TWICE as many REAL smartphones as did Samsung during that quarter when you compare like product to like product in the same category.

Pinging ThunderSleeps and dayglored for their ping lists.

Apple v. Samsung By the Numbers
Ping!

The latest Apple/Mac/iOS Pings can be found by searching Keyword "ApplePingList" on FreeRepublic's Search.

If you want on or off the Mac Ping List, Freepmail me

[Swordmaker]

No, Apple has not donated to Hillary. Perhaps the Apple Employees Political Action Committee, which has a history of donating to Liberal causes over Conservative ones by an 80% to 20% ratio, has donated to Hillary, though. I would bet that CEO Tim Cook has donated to Hillary or Bernie.

[Shanghai Dan]

Well.

There’s some twisted logic using statements from 2-3 years ago. And calling phones that use Android as “not smartphones”.

I’ll go with the reported news, rather than the diatribe of an Apple fan.

[Shanghai Dan]

I have the same phone - the Note 5 simply rocks. Nothing like having a phone you can take handwritten notes on!

[Shanghai Dan]

Red herring, VanDeKoik. ALL the tech companies give money to Hillary.

Does that include Samsung, a South Korean company? I guess it wouldn't surprise me what with the Clinton history of accepting illegal foreign donations... :)

[Shanghai Dan]

And from another article on the same subject:

"According to Samsung, it shipped about 90 million handsets in the April-June period with smartphones making up more than 80 per cent of the total, the Korea Herald reported."

So that's about 72 MILLION smartphones (80% of 90 million). Your twisted logic doesn't hold true. Nearly twice what Apple shipped. Sorry!

[Swordmaker]

There’s some twisted logic using statements from 2-3 years ago. And calling phones that use Android as “not smartphones”.

Android is an OS that is free to use. What it is used on determines what the phone is capable of. There are many Android phones that are NOT smartphones because they are not equipped with the capabilities to be smartphones even though they are running Android as a base operating system. That fact does not make them a fully functional smartphone.

Samsung Galaxy Android Phone
This type of phone allows you to make voice
calls and send text messages but little else

Samsung S6 Android Feature Flip Phone
A type of mobile phone incorporating features such as
the ability to access the Internet and play music but
lacks the advanced functionality of a smartphone.

Samsung S7 Edge Android Smartphone
A smartphone is a mobile phone built on a mobile
operating system, with more advanced computing
capability and connectivity than a feature phone.

It merely means it was cheap and convenient for the maker of that phone to use Android OS to drive what it is capable of doing. Samsung itself admitted their product mix was NOT all smartphones; it included basic phones that only made phone calls, texts, took photos, etc. . . but could not connect to the internet. They also made Feature phones which had more capabilities but could not add features by downloading apps. They operated only on what they were configured with by the maker and/or the carrier. What these basic phones and feature phones have in common with smartphones is they run on Android. . . but they are NOT, by industry definition, smartphones.

Just because YOU don't know the difference doesn't mean it does not exist. Nor id the data from two or three years ago invalid for product mix. All you have to do is walk into any carrier store or look on line at the carrier's websites and see what they offer as handsets. You will see LOTS of feature and basic phones offered. . . and that is in the USA where 65% of the phones sold ARE smartphones. That is NOT the case in the rest of the world market.

As I related to you, Samsung announced that in the later half of 2014 they reduced their smartphone share of their product mix from 30% in 2013 to only 19% while increasing the attention to the lower tier phones, the feature and basic phones . . . and their smartphone sales did NOT recover through the rest of 2015 while Apple's sales increased.

There is no "twisted logic" here. That comes from you and the people at IDC and Gartner who continually count NON-smartphones as smartphones. Nor was a rational explanation of what they are doing, with facts to back it up, a "diatribe." You just don't like those facts or the logic of my well argued position.

[Swordmaker]

So that's about 72 MILLION smartphones (80% of 90 million). Your twisted logic doesn't hold true. Nearly twice what Apple shipped. Sorry!

Something doesn't agree with their first statement:

Samsung sold 16 million units of the S7 smartphone for the second quarter. In New York on Aug. 2, Samsung will begin selling the Galaxy S7 Note smartphone.

The Galaxy S7 is there best selling line and it sold only 16 million in the second quarter. Allow for a few more millions of the Note line being shipped and you reach my calculated 23.1 million smartphones.

What doesn't work is the claim of 80% smartphones in the 2rd quarter of 2016 which needs a HUGE jump in the best selling S7 line when their new S7 note doesn't come on line until August.

That agrees quite closely with my analysis for the second quarter. The only way they can get to that 72 million smartphones is if they are counting all of the FEATURE phones as shipped "smartphones" which I would not put past them and the balance as dumb basic phones. In other words, they are essentially claiming they no longer are making any feature phones at all. . . yet that cannot be true because the carriers are still selling large numbers of 2016 model Samsung Feature phones, both here and even more in the third-world.

That would agree with the rest of the 30% being the dumb basic phones as we know they make both feature phones and basic phones in quantities. . . in other words, they are spreading propaganda about their numbers again by conflating feature phones as smartphones. This defining of feature phones as smartphones is NOT in agreement with industry wide standard definition. This is the SAME thing they tried to pull in court until the JUDGE pulled them up short and demanded actual factual audited figures.

These are either smartphones, or they are not. If they are feature phones, then they are NOT smartphones. . . and their quoted guy was just puffing because they carried an Android OS.

[Swordmaker]

Editorial: Sorry Android bloggers, but Samsung's Galaxy S7 didn't outsell Apple's iPhone 6s

By Daniel Eran Dilger
Saturday, July 16, 2016, 05:44 pm PT (08:44 pm ET)Android fan blogs, led by The Verge, shouted to their audiences this week that Samsung's flagship Galaxy S7 managed to surpass sales of Apple's iPhone 6s, based on a Kantar survey of U.S. buyers. The story illuminates some interesting contradictions and exposes other misleading narratives about the smartphone market.

Samsung, the underdog who's always on top

Some facts are not controversial. Samsung consistently ships greater numbers of phones than Apple. However, the reason why Apple is so much more profitable and influential than Samsung relates to the quality of the phones Apple sells, not the total unit numbers.

That's reflected in Apple's Average Selling Prices for iPhones, which have hovered above $650 as Android phones flirt with $200. While many Chinese phone makers almost exclusively make cheap phones (and therefore earn very little, if anything), Samsung offers flagship models that cost as much or more than iPhones. The problem is that Samsung can't manage to sell these premium phones in iPhone-like quantities.


Top 5 WW Smartphone Vendors, 2016Q1 Unit Shipments (Millions)

Back in 2014, Samsung reached a peak number of flagship Galaxy S4 sales that coincided with record profits from its phone making IM division. However, when Apple launched iPhone 6 it eviscerated Samsung's high end sales. While the company's total phone shipments remained about the same, its premium models saw unit sales declines of around 50 percent, resulting in a devastating blow to its profitability.

This year, Samsung's premium Galaxy S7 sales have indeed performed better, relative to the last two years of slump. However, the company's performance is nowhere near Apple's and only in line with the Galaxy S4—a phone that was outsold by iPhone 5.

3 days of iPhone 6s outsold 3 weeks of Galaxy S7

Samsung has historically launched its Galaxy S flagship in April, missing out on both the Western holiday quarter and China's Lunar New Year; both are peak quarters for Apple's highly cyclical iPhone sales. This isn't on accident or because the company is stupid; Samsung knows it can't directly compete against an Apple launch so it purposely avoids doing so.

This year, Samsung launched its Galaxy S7 earlier than usual on March 11. This enabled Samsung to get a month-long jump on two flagship launches of its rivals: LG and HTC. Samsung didn't report official sales numbers, but is estimated to have shipped around 10 million S7 and S7 Edge models in the remaining three weeks of the March quarter, out of the 82 million smartphones IDC estimates that Samsung shipped in total.

By way of comparison, at the weekend launch of iPhone 6s last Sept 25, Apple announced sales of over 13 million units across 3 days. In total, Apple sold 75 million iPhones in the launch quarter, the most it has ever sold.

None of these were "carrier friendly, good enough" models. They were all premium priced iPhones with an ASP of $650. During that same winter quarter, Samsung still shipped millions more total phones than Apple, but it earned much less. In the March quarter, Samsung IM earned $3.38 billion vs Apple's $13.987 billion.

Also notable is the fact that Samsung similarly scrambled to launch its larger flagship, the Galaxy Note 5, earlier than usual, too. Previously launched in October, it was instead moved up to August last year in an effort to get a jump on Apple's iPhone 6s Plus. That doesn't seem to have mattered, because Apple still exceeded its previous peak in launch weekend and total quarterly sales.

Apple has a problem but it's not Samsung

Despite achieving a record fiscal Q1 over the winter, Apple's earnings and guidance for Q2 raised concerns of slowing growth. Apple blamed a global economic downturn, and in particular noted the affect of unfavorable currency exchange rates. A strong U.S. dollar was effectively raising Apple's prices for almost everyone outside the U.S., and particularly in China. Incidentally, that's a problem Samsung doesn't face because it reports earnings in Korean Won.

However, rather than accepting Apple's figures, a variety of analysts and bloggers invented a New Realty where there's no longer any growth potential for premium smartphones, particularly in mature markets like the U.S., where many were repeating verbatim that "everyone who wants an iPhone already has an iPhone."

After a solid three months of preaching the gospel of Peak Phone, many of these same people have done a 180 and are now claiming that Samsung is showing Apple how to sell growing numbers of premium phones.

They're pointing to a global year-over-year quarterly decline in iPhone sales by Apple compared to an increase in Galaxy S7 sales by Samsung—a launch quarter with an estimated 25 percent growth over the S6 (according to data from Counterpoint Research.)

However, context is relevant. Last year, Apple sold 61.2 million iPhones in Q2; this year sales reached "only" 51.2 million. Samsung's premium Galaxy S7—despite a big 25 percent year-over-year jump—still only reached 10 million. Counterpoint attributed Samsung's Galaxy S7 "growth" to the previous failure of the S6

Counterpoint attributed Samsung's Galaxy S7 "growth" to the previous failure of the S6. The firm noted that "Samsung lost the window of opportunity" last year in being unable to satisfy customer demand due to supply constraints in the models customers wanted.

Samsung's "growth" came, not from being more exciting than iPhones, but in being less incompetent in this year's Galaxy S launch. It also came from increased promotional bundling deals that Counterpoint noted "included VR headsets, buy-one-get-one deals, tablets and even televisions."

And rather than being real growth, Counterpoint's research director Neil Shah estimated that the Galaxy S7 was only "on par with the popular S4 model," which launched three years ago.

Apple's sales were down from its year-ago iPhone 6 sales peak, but up dramatically from 2014's iPhone 5. Samsung's flagship has been down for years, and has only returned to the frozen performance of its own iPhone 5 rival. When you compare percentages of growth in different numbers, you arrive at often meaningless statistics that can be very misleading.

Further, while Samsung reversed the downward trend in its flagship, its total sales of smartphones were actually slightly down. IDC observed in April that "Samsung remained the leader in the worldwide smartphone market despite a year-over-year decline of 0.6% in shipments."

So while Apple was immediately assumed to be permanently unable to grow after one quarter of failing to exceed its year ago peak sales related to iPhone 6, Samsung was given two years to return to its former peak from 2014, and celebrated for "growing" all that time, despite still having made no real progress from that former peak.

"Apple versus Samsung is so over"

This week, Lauren Guenveur of Kantar noted in the firms' Worldpanel report that, "anyone still focusing on these two giant competitors, however, is missing the bigger picture."

Erasing the idea that iPhone buyers were flocking to Samsung, Guenveur noted that in the U.S., "the majority of sales came from customers repurchasing and upgrading within their preferred brand. Among those intending to change devices within the next year, 88% of current Apple users and 86% of current Samsung users intend to stay loyal."

Among defectors, however, the rate of buyers switching to Apple was 2.8 times higher: "just 5% of Samsung purchases came from those switching away from Apple, while 14% of Apple purchasers came from those switching away from Samsung." "Just 5% of Samsung purchases came from those switching away from Apple, while 14% of Apple purchasers came from those switching away from Samsung"

Kantar Worldpanel data is not based on sales channel data. It's compiled from a surveys of participants. That makes it useful for noting broad trends.

But based on that report, Vlad Savov wrote for The Verge that "Samsung's Galaxy S7 is outselling Apple's iPhone 6S in the US," although noting that "granted, it's not a fair fight, owing to Samsung's S7 and S7 Edge being the newer handsets by half a year."

It's also "not really fair" to ignore 13 million iPhone 6s sold in its first three days, plus another 113 million iPhones sold across two quarters, and then look at a fraction of Samsung's sales (exuberant estimates say the company sold maybe 25 million premium phones across two quarters of 2016) and portray survey results as definitive in making sales comparisons.

Apple and Samsung globally

The Verge report also ignored the rest of Kantar's data. That includes figures for China, "the world's largest smartphone market," which showed that Samsung has seen its once-leading share in urban markets collapse from 34 percent back in 2014 to 9 percent two years later. Samsung's top spot in that market is now occupied by Apple and Huawei.

Further, while Savov called Samsung's relatively high brand loyalty in the U.S. a "monumental achievement," he ignored the situation in China, where Kantar's said brand loyalty "remained low."

Among Huawei's buyers, Kantar reported that 24 percent switched from Samsung phones, and among iPhone buyers, 25 percent switched from Samsung, an even higher rate than in the U.S.

That aligns with data presented by Apple's chief executive Tim Cook, who has noted record numbers of Android switchers buying iPhones.

Samsung should be applauded for fixing its Galaxy S supply problems this year. But it doesn't need fake headlines pretending that it's performing better than Apple, especially given that in reality it hasn't grown its premium sales at all over the last two years, is making no real progress in significantly expanding its flat sales of smartphones in general, and has lost its leadership position in China entirely.

[SamAdams76]

What about net profit per device? I’m thinking that is not even close.

The iPhone is worth the extra money. The handset and OS are bulletproof. I have never experienced a single failure on any of my iPhones. And I drop them many times because I am clumsy.

[jalisco555]

Hey guys, rather than bickering over whose phones sell more why don’t we celebrate the fact that capitalism and human ingenuity have made these devices available all over the world? I remember reading 20 years ago that fewer than half of the people on earth had ever made or received a phone call in their lives. Thanks to these devices this is no longer true. Billions of people are now able to communicate who 20 years ago were mostly shut out of the global economy. This is wonderful!

[dayglored]

> Does that include Samsung, a South Korean company? I guess it wouldn't surprise me what with the Clinton history of accepting illegal foreign donations... :)

Precisely. They have their conduits, don't doubt it for a moment.

[Crusher138]

One is a USA based company and one is a South Korean based company.

For all patriotic Freepers the argument should end there.

[jalisco555]

Well, I’m an Iphone guy but I’ve seen firsthand how transformative cellular technology can be in the third world.

[Shanghai Dan]

What about net profit per device? I’m thinking that is not even close.

I wonder why that is considered a good thing - that Apple makes more profit per iPhone. Doesn't that mean they are charging more, comparatively, for the product as compared to others? That the customer is paying more than "normal"? After all - profit comes from sales price.

[Shanghai Dan]

<- SNIP A BIG CUT-AND-PASTE ->

You and Mr. Dilger made the same mistake. This is about Q2. Your lovingly crafted, long-winded post was for Q1.

Sorry!

[Shanghai Dan]

Someone needs to go to Japan!

Smart flip phones (like this one) are the norm there. For some reason, Japan (and a big chunk of Taiwan as well) love their flip phones, and they are hardly "feature phones". Browsers, apps, GPS - everything you can do on your smartphone (including touch screen) but in a flip phone style.

Go out, travel a bit, see the world, educate yourself! Then you'll see the twisted logic of using 3 year old data to dispute current information...

[Swordmaker]

Japan’s consumers’ #1 preferred brand phone is the iPhone with 29% growth in 2016 while already commanding a large presence. That Samsung W2016 phone is listed among Samsung’s premium Feature phones, not among their premium smartphone listings. Nice try. So what if it has browsers, apps, or GPS. . . it still doesn’t dome up to the full functionality of a smartphone, by definition as established by the industry. For example, this phone has limited WIFI capability, a less than 4” screen, and text input is from that ten key pad. It is limited to mobile format websites only. Ergo, it is not a full function smartphone; it is a feature phone.