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Samsung Surpasses Apple as World's Top Smartphone Seller posted by Thom Holwerda on Fri 28th Oct 2011 14:49 UTC
Remember when Apple surpassed Nokia to become the world's best-selling smartphone manufacturer? Well, Apple only had one quarter to enjoy this title, since Samsung just soared past them by quadrupling its smartphone shipments, making Samsung the largest smartphone manufacturer in the world.Samsung shipped 27.8 million smartphones this past quarter, grabbing a total of 23.8% of the market; the company quadrupled its smartphone shipments compared to the same quarter one year ago. Apple sold 17.1 smartpones, capturing 14.6% of the market. There is generally some confusion about sold vs. shipped, but considering the shipping times for the Samsung Galaxy SII were rated as "unknown" and "4-6 weeks" until early October, I don't think there's a lot of channel stuffing going on here - you don't quadruple shipments if resellers can't get rid of these things.
I have also been interested in how, exactly, Apple keeps track of units sold, since I'd hazard a guess most iPhones in at least Europe are sold by resellers, and not by Apple itself. Perhaps they use activation data? That's something other manufacturers can't do, obviously. Still, the shipped vs. sold is something to take into account here.
As a sidenote, this reminded me of May last year, when I predicted the iPhone would be relegated to a market share of about 10% within a few quarters. This prediction was cast aside by some as unlikely or as me just being anti-Apple, but even though it doesn't matter in the grand scheme of things, it's always nice to be vindicated (well, almost). I never claimed I'm never incredibly petty.
As far as profit margins go, Samsung's are the second best of the market at 16.9% (and they're rising). Apple is still by far the undisputed king here with profit margins of 30.8%, meaning Apple is still raking in a fat profit margin - but Samsung is gunning for them. Samsung truly controls the entire stack, while Apple only designs their phones, and then buys every component from somewhere else, only to then have them assembled somewhere else. In theory, Samsung should be able to have profit margins better than Apple's.
The strong results in Samsung's telecommunications divisions also means this division now accounts for 60% of Samsung Electronics' operating profit, surpassing the chip division for the first time. However, since 26% of the iPhone's component costs (iPhone 4 in this case) goes to Samsung, the chip division may see an uptick next quarter due to the launch of the iPhone 4S. Of course, the 4S will undoubtedly affect Apple's numbers as well, but it's unlikely to close the gap with Samsung.
As a final note, it's of course crucial to mention that as far as tablets go, Samsung still has a very long way to go - the iPad rules supreme in this space. Add to that the iPod Touch, and iOS surely isn't going anywhere any time soon. Android is, for all intents and purposes, a one trick pony (smartphones), while iOS is also very successful on music players and tablets. This matters for developers.
What all this ascending and abdicating of thrones means is that competition is very, very healthy in the smartphone space (making the patent lawsuits all the more sad). Companies continuously push each other to create better products, and there's no way in hell that either iOS or Android would be where they are today without breathing down each other's necks. On top of that, Windows Phone 7 would never have existed - and that would be a loss, since it's by far the most unique and original of the bunch.
It's sad we had to say goodbye to webOS and MeeGo - then again, in such a volatile market, who knows where we'll be 12 months from now?
