Samsung outstrips iPhone sales to ring up record profit

The Guardian ^ | Friday 27 April 2012 04.28 EDT | Associated Press

[SmokingJoe]

A surge in Galaxy smartphone sales fuelled earnings at Samsung Electronics to a record high in the first quarter, usually a tough season for the global consumer electronics industry, outshining handset rivals such as Nokia.

Samsung sold more smartphones in the first three months of the year than Apple and raked in more than 70% of its operating profit from mobile businesses. Shares in Samsung shot up nearly 3%.

Net profit nearly doubled from a year earlier to a record 5.05 trillion won (£2.75bn) for the quarter to 31 March.

Operating profit also hit a record high, at 5.85 trillion won, which was in line with expectations. Sales rose 22% from a year earlier to 45.3tn won.

Strong demand for high-end smartphones, such as the Galaxy Note and the Galaxy S2 introduced last year, helped mask lower profit from memory chips, another Samsung flagship business.

"It was a shock for semiconductor, a surprise for handset," said Lee Ka-keun, a Seoul-based analyst at Hana Daetoo Securities.

The Suwon, Korea-based company expects to outdo its record profit in the coming quarters. It will announce a new version of the Galaxy phone next week and global demand for personal computers is picking up, bringing more cash to memory chip-makers.

-------------------

Samsung's mobile communications division, which includes smartphones, pocketed 4.27tn won of operating profit in the quarter after seeing significant sales growth of high-end smartphones in developing markets including China, a key battlefield for mobile phone makers.

After narrowly beating Apple last year, Samsung's smartphone sales exceeded Apple's by a large margin in the first quarter. Strategy Analytics said Samsung became the world's top smartphone maker, selling 44.5m handsets in the January-March period, followed by Apple's 35.1m.

[ReignOfError]

Not necessarily. Plenty of times the competition was more useful, but they didn’t have the market penetration. Apple is really good at making sure the faithful know about the new stuff.

More useful, like the Archos Jukebox? The Treo? The endless Windows tablets that amounted to laptops with the keyboard hacked off?

The smartphone market is still actually pretty small and still actually dominated by gadget geeks.

Half a billion smartphones shipped in 2011 alone. There aren't that many gadget geeks.

Notice their most successful competition AVOIDS looking like Apple products, because they’re smart enough to realize that’s a dead end, people that want stuff that looks like Apple want Apple, people who don’t want Apple don’t want Apple knockoffs either, they want something else.

Capacitive multi-touch screen covering nearly all of the face, no hardware keyboard. That describes no smartphone before the iPhone, and the vast majority of smartphones now. That describes no tablet computers sold before the iPhone, and every one trying to compete with it now. If they're trying to avoid looking like Apple products, they're doing a piss-poor job.

[discostu]

More useful like all their GUI competition before they finally did it right with OSX. Or many of the Symbian based phones.

Part of the smartphone growth now is they’re all smart. Tried buying a non-smart cellphone lately? Heck even $20 disposable trackfons can browse the freaking web now. But the high end of the smarts still aren’t that big, iPhone is at under 5% of the handheld market.

I didn’t say their weren’t knockoffs, but look at the phones actually doing well in the market vs the iPhone. You’ve got a lot of mini-keyboards a lack of touchscreens. And a lot of the tablet competition is avoiding it too. You’re suffering from confirmation bias, only paying attention to the stuff that looks like Apple. I’m probably suffering from it too since “looks like Apple” means touchscreen and I won’t buy stuff with touchscreens. There’s plenty of “doesn’t look anything like Apple” out there.

[Swordmaker]

Hey, didn't you try to deny that overall Android cell phone sales had overtaken iPhone sales when that phenomenon started as well?

I follow the facts, not the hype. When it HAD NOT, I pointed out the correct facts. When it did, I also pointed out the correct facts. In this instance, in the US, AT&T's last quarter figures show 75% of their smartphone sales were iPhones, better than 50% of both Verizon and Sprint sales, in the same quarter were iPhones...

AND, in this last quarter, the world wide figures, when researched, AGAIN show that they are comparing Apples to a combination of Apples and Oranges... Apple only sells smartphones while Samsung sells both smartphones and also sells feature phones and basic phones and reports the combination in their Mobile phone sales numbers. Apparently, this article is using that combined gross sales figure, confabulating the total sales of Samsung phones sold with Samsung SMARTPHONES sold. . . AND, Samsung shipped a piss-pot full of un-sold Samsung Galaxy III phones into the inventory stream in the last two weeks of the quarter, stuffing the warehouses and shipping lanes. Out the door, but not into consumer's hands. Apple only counts iPhones as sold when they are sold to end users.

The New Samsung Galaxy S III phone costs about the same or more to manufacture and the subsidy from the carrier's is actually HIGHER and the per unit cost from the subscriber is MORE at a reported $249 per handset on introduction (that's what the Galaxy II was, and is now available in India at 12,000 rupees [$246] with 2 year contract), than it is for the iPhones... and APPLE picks up the support costs of the iPhone and iOS while the carrier has to pick up the support costs of the Android OS AND the phone for Samsung!

Now, let's look at the sales profits... Samsung's profits for the quarter, with 70% of that profit tagged to Mobile Communications was $4.47 Billion versus Apple's $11.7 Billion with 67% tagged to the iPhone. $3.13 Billion in profits from Samsung's entire Mobile Communications division v. $7.83 Billion for Apple from just the iPhone... you must see the dilemma. The numbers don't fit.

Samsung is shipping a lot of cheap phones... feature phones and dumb phones.

[Swordmaker]

Part of the smartphone growth now is they’re all smart. Tried buying a non-smart cellphone lately?

There are LOTS of non-smart phones out there that don't require a data plan. You just have not looked. The ability to get on the internet is NOT the defining ability of a smartphone. Feature phones have been able to do that for a long time...

But the high end of the smarts still aren’t that big, iPhone is at under 5% of the handheld market.

You are wrong in your "under 5%" of the handheld market. In the 4th Quarter of 2011, Apple's world wide share of ALL phones, smart and non-smart was 8.7%... and it has climbed since then. In the last quarter, Nokia was knocked out of 1st place... and Apple has climbed. It is over 9% but less than 10%. Your figure was accurate in the last quarter of 2010... way out of date for a company growing now at a 120% year over year average rate each quarter.

[ReignOfError]

More useful like all their GUI competition before they finally did it right with OSX.

I'm a little confused by this. We were talking about a more-useful alternative that pre-dated, and was outsold by, Apple's version. "all their GUI competition" didn't pre-date the classic MacOS.

Or many of the Symbian based phones.

Are you arguing that many Symbian phones were more useful than the iPhone?

Part of the smartphone growth now is they’re all smart. Tried buying a non-smart cellphone lately?

I count five from AT&T, half a dozen each from Sprint and Verizon, and a couple from T-Mobile. The line between a "smartphone" and a "feature phone" can get a bit blurry, and I think that a lot of what you're calling smartphones are what I -- and the people who compile the sales statistics -- would call feature phones.

Heck even $20 disposable trackfons can browse the freaking web now.

If you're talking about the kind of WAP browser I had on my Qualcomm phone back in 1999, sure. A usable HTML browser, not so much. I don't think that $20 Tracfone is included in the analysts' smartphone figures.

I didn’t say their weren’t knockoffs, but look at the phones actually doing well in the market vs the iPhone. You’ve got a lot of mini-keyboards a lack of touchscreens.

Assuming we're talking about actual smartphones and not feature phones, those are called Blackberries. Don't ask how that company is doing. Other than Blackberry, I counted maybe ten models with a physical keyboard, some of which were old, discontinued models (Palm Pixi? Really?). Maybe four of five of those lacked touch screens. Sure, those phones still exist; so do computers that boot to a command line. So do horses. They're not driving the market.

Look at the Web sites for the carriers. Look on the shelves at their retail stores, or at Best Buy or Radio Shack. Five years ago, you would have seen flip phones galore, with one or two smartphones tucked back in the corner. Now, the ratio is reversed. That is creating a market.

[itsahoot]

Just because they receive patents on things doesn’t mean they invented the smartphone.

I know for a fact that after WW II th Russians invented everything, their revised text books debunked all that stuff Edison invented.

Personally, I don't care, the only people that seem to are patent trolls. If they make a product that I like and can afford,.I buy it. You should try that.

[itsahoot]

The Psion was the first PDA.

I had a Casio data watch that had more functions than your Psion and it included a phone dialer, long before your Psion.

[discostu]

As far as I’m concerned if it does anything more than make phonecalls and texts it’s a smartphone. Maybe not as smartphone as other smartphones, but I did make the distinction between the high end and low end of the market.

According to here http://www.pcmag.com/article2/0,2817,2395951,00.asp#fbid=SLgcdJun7IU Apple has 4%. And that’s Nov 2011.

[St_Thomas_Aquinas]

I LOVE watching Netflix while my wife shops, so I would love to get a Galaxy. But Verizon doesn’t have it. They don’t have anything with a big screen.

[discostu]

There was quite a bit of GUI competition that predated Mac 1. And some of them were pretty kick butt (DESQView being one of my all time favorites). Add to that the fact that the Mac OS really blew until OSX, and there’s plenty of competition doing stuff well before Apple got around to doing it well.

I’m arguing that Symbian phones were useful. That was your argument that nobody did anything useful in these markets before Apple. Oh and Symbian had a touchscreen in 2000 so the idea that Apple was first to put a touchscreen on a smartphone is wrong.

Browsing the internet on a phone is smart enough. This smart/ feature thing is a distinction without a difference. At best it’s low end high end. If it’s a phone doing a heck of a lot more than making phone calls it’s a smartphone. Maybe not a high end smartphone, but it’s still smart.

There’s plenty of non-blackberries with keyboards.

No that’s not creating a market, that’s GROWTH in a market. The market already existed. There were smartphones before the iPhone, there were touchscreen smartphones before the iPhone, the market existed BEFORE the iPhone. It was smaller, but that’s as much about all the other companies as it is about Apple.

[discostu]

Well take it up with wiki, and other places. They count the Psion as the first PDA.

[St_Thomas_Aquinas]

Siri sounds very cool. Just when I think, “what’s left to do? “ I should know better...

[St_Thomas_Aquinas]

Siri sounds very cool. Just when I think, “what’s left to do? “ I should know better...

[SmokingJoe]

“I follow the facts, not the hype”

Naaaah. You follow your heeart, not the facts.

“When it HAD NOT, I pointed out the correct facts. When it did, I also pointed out the correct facts”

More like, when it had changed, you refused to accept the facts and instead blamed the tracking agencies like Gartner, IDC etc for being anti-Apple(lol). You were finally forced to accept the reality of Androids outselling iPhones when the evidence became too overwhhelmimng for even the most fanatic of Apple-bots to ignore.

“In this instance, in the US, AT&T's last quarter figures show 75% of their smartphone sales were iPhones, better than 50% of both Verizon and Sprint sales, in the same quarter were iPhones... “

Luckily, the US makes up only a fraction of the world's smarphone market, with Europe and Asia accounting for vastly more smartphone sales. This article is not about US smartphonbe sales, its about worldwide smartphone sales.market share. In China alone, more smart-phones are sold than the entire US market.

&ldquoAND, in this last quarter, the world wide figures, when researched, AGAIN show that they are comparing Apples to a combination of Apples and Oranges... Apple only sells smart-phones while Samsung sells both smart-phones and also sells feature phones and basic phones and reports the combination in their Mobile phone sales numbers. Apparently, this article is using that combined gross sales figure, confabulating the total sales of Samsung phones sold with Samsung SMARTPHONES sold. .”

Ummm..how about NO?
It's, you who is confused, not the analysts.
In the last quarter, Samsung did two things.
They first of all overtook Nokia to become the top overall cell phone seller on the planet(feature and smart-phones). Then they did something else: Samsung also overtook Apple to become the top SMARTphone seller on the planet.

The Daily Telegraph, UK:
“The Korean electronics giant saw sales of its handsets surge in the first three months of the year, helping to knock the beleaguered Finnish mobile company from the position it has occupied for 14 years.

It also managed to widen its lead over Apple as the biggest producer of smartphones, as sales of high-end handsets like the Galaxy Note and Galaxy S2 outstripped the iPhone by nearly 10m units.

Samsung shipped 44.5m smartphones during the first three months of the year, compared with 35.1m iPhones, according to research company Strategy Analytics. It is not the first time that Samsung has outsold Apple, but it is the first time that it has done so with anything like this sort of margin, which may well widen further after Samsung launches its latest device, expected to be the S3 smartphone, next week”

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/9230601/Samsung-profits-jump-as-smartphone-sales-outstrip-Apple.html

Strategy Analytics:

http://www.strategyanalytics.com/default.aspx?mod=pressreleaseviewer&a0=5212

” AND, Samsung shipped a piss-pot full of un-sold Samsung Galaxy III phones into the inventory stream in the last two weeks of the quarter, stuffing the warehouses and shipping lanes”

Chuckle!
Been seeing that being piece of wishful thinking posted by Apple fangirls, in a desperate rearguard action to try and stem the Samsung juggernaut. Care to share any authentic source(not fan-girl tittle tattle) for this piece of fiction?

“The New Samsung Galaxy S III phone costs about the same or more to manufacture and the subsidy from the carrier's is actually HIGHER and the per unit cost from the subscriber is MORE at a reported $249 per handset on introduction “

Ummm...the Galaxy III has not even been announced yet, let alone introduced to the market. Funny, you already know how much they cost to manufacture, and the subsidies that the phone companies give on a product thay are neither selling, nor have even officially announced. You have way more clairvoyant powers than previously thought. :)

“Now, let's look at the sales profits... Samsung’s profits for the quarter, with 70% of that profit tagged to Mobile Communications was $4.47 Billion versus Apple's $11.7 Billion with 67% tagged to the iPhone”

True. That is why the phone companies(who are being screwed by Apple), are busy looking for alternatives:
Why AT&T and Verizon Are Rooting for Windows Phones
http://bits.blogs.nytimes.com/2012/04/24/carriers-windows-phone/
But then this is not about Apple profits versus Samsung profits. Its about Samsung overtaking Apple in worldwide smart-phone sales. Way to try and change the topic. Typical bait and switch tactics.

[itsahoot]

Well I guess I can fix wiki so it Psion was invent in 1741 if ti would make you feel any better. How about making something better than the iPad/iPhone, sell it for half the price, you could make a killing.

[discostu]

Congratulations, you made a 100% logic free, point free, content free, meaningless post. Quite a feat.

[itsahoot]

Find something to do with you time, who knows maybe you could actually build something worthwhile, since you seem totally unable to tear down Apple.

Who on God's Earth wants to fight the war of 1812 again?

[discostu]

I’m not tearing down anything. Simply pointing out reality. Reality is that Apple is not first in their markets. And there’s nothing wrong with that, very few companies manage to be first at anything ever, and usually the company that is first at something can’t figure out how to monetize it and goes under, if they’re lucky they get bought by somebody that sees the money possibility. Apple wasn’t first at the PDA, first to call it that sure, but not the first with the functional concept. In general Psion is considered to have been first to that market in 1984, maybe there were other companies with similar stuff out, maybe even before then, but all those things you want to throw out there doesn’t change the basic fact that 1992’s Newton was not first.

Now it doesn’t bother me that Apple wasn’t first, just like it doesn’t bother me that the company I work for wasn’t first into the technology market of the product I work on. If it bothers you then you probably shouldn’t be such a fanboy with parts of your ego tied to some company you’re probably not even a part of.

[Mr. Blonde]

Verizon does have the Galaxy Nexus with a 4.65 inch screen, which while a good deal smaller than the Galaxy Note’s 5.3 inch screen, is pretty big. I love mine thus far. A leaked roadmap for Verizon says they will be releasing an HTC made phone similar to the Galaxy Note.

[Mr. Blonde]

Verizon does have the Galaxy Nexus with a 4.65 inch screen, which while a good deal smaller than the Galaxy Note’s 5.3 inch screen, is pretty big. I love mine thus far. A leaked roadmap for Verizon says they will be releasing an HTC made phone similar to the Galaxy Note.