Samsung Shipped Six Times More Phones Than Apple, But What About Profits?

Samsung Shipped Six Times More Phones Than Apple, But What About Profits?

Photo by the justified sinner - http://flic.kr/p/95ZbjT

Here’s a great sleight-of-hand trick from Samsung: trumpet that you’ve sold 300 million phones through November. While everyone is amazed that the South Korean company pumped out nearly six times as many mobile phones than Apple, people will forget the iPhone maker rules smartphone profits. Nice try, but it won’t work.

Apparently, despite all the court actions around the globe, some Galaxy S smartphones are getting into consumers’ hands. Samsung credits the Galaxy S series as the engine for increased sales. Indeed, the S series sold more than 10 million units in just five months — or 500,000 handsets per week. By comparison, Apple sold 4 million iPhone 4S handsets in just the first two days of availability. If the Galaxy S series is the fastest-selling handset for Samsung, we can only wonder how many mobile phones the company usually sells.

Despite the numbers, a Samsung executive told The Dong-a libo that the record shipment was due to “upscale designs and cutting-edge technology.” The comment is ironic, given the flurry of court cases where Apple contends Samsung devices rip-off the iPhone design and infringe upon the smartphone’s patents.

But back to profits – where Samsung would rather you not pay attention. Repeatedly, we’ve seen Apple squeeze more profits from its iPhones. At the start of 2011, we reported how Apple had 51 percent of smartphone profits, leaving everyone else to fight over the scraps. By the end of July, that percentage climbed to 66.3 percent. Where was Samsung? Down to 15 percent of the market profit, according to Asymco analyst Horace Dediu.

All of which makes us wonder about Samsung’s latest boast that its sales figures “demonstrates that Korea is taking the center stage in the global mobile handset market.” News which will likely make Apple cry — all the way to the bank.

  • Andrew Vierling

    So the point of your article is that Apple is better because they are able to price gouge, launch a global campaign of stifling competition through litigation, and reduce competition through monopolistic practices with suppliers? How long have you been a member of the tea party? :-)

  • iphoneglance

    if you board a train in london and take a look around, 10 out of 12 people have an iPhone that shows that Apple is literally ruling the market. Not even that iPod touches are huge too.

  • AppleKilledMobileFlash

    …but, Android is winning.  They’re selling millions upon millions of cheap crapphones like Nokia used to do so that’s supposed to make Android OS devices superior to iOS devices because Wall Street dictates that high market share is all that matters.  I suppose you could use that analogy to claim that Toyota is putting Porsche out of business because smart consumers feel that you can get around in a Toyota just as well as in a supposedly overpriced Porsche.  Why the hell would Porsche or a Porsche owner give a crap about all the Toyotas that clog the roads?  Jeez, that makes no sense at all.  Is Toyota considered winning merely because it sells more cars?  Porsche never intended to outsell Toyota which is about a lame a goal as possible.  Porsche sells vehicles to consumers that appreciate what a Porsche can deliver in workmanship and drivability.  Screw outright sales.

  • nolavabo

    You forgot to mention the most important point. Porsche makes more money than Toyota does. In fact, Porsche is the most profitable car company in the world, truly underlining how irrelevant a metric market share really is.

  • gareth edwards

    couldn’t agree more. I travelled down from Leicester to London over the weekend. It was crazy how many people were toting Apple kit. From my seat on a table I could see about 10 people or there abouts. Out of those I saw 1 air, 3 iPhones, 1 iPod and 1 iPad. That’s pretty scary/amazing.

  • Tommy Tamocha

    First of all, what is up with the price gouging lie you started your post with? At .99 cents the 3GS is still selling in the millions. A perfectly good iPhone 4 can be had for $99 (both w/contract BTW). When you begin with lies, the rest of your post immediately lacks credibility. NIce try though! PS – You actually sound more like a member of TB party, spouting easily disproven bull.

  • sy69

    Funny how which metrics are considered “important” changes with the wind. 

    Sure, profits are important in the short term, but for investors only.

    In the long term, everyone should be concerned about falling market share.  Market share drives developer interest, which translates to apps, which translates to users.  Even though devs make more per app on iOS today, at the current rate of market share decline we can’t expect that to last forever.

    If Apple were to rest on its laurels based only on the past it may cost the platform the future.  The range of phones will have to diversify:  either Apple will have to offer a wider range of models, or iOS will have to be licensed to those who can.

    Heresy?  Let’s meet back here in 18 months and see where the cards fall.

    In the meantime, those encouraging complacency from Apple with articles like this do a disservice to the company.

  • Tommy Tamocha

    “at the current rate of market share decline we can’t expect that to last forever.”

    Lies. There is no market share decline of iOS.

    Figures from Global Statcounter put iOS on 24.21 percent for November, up from 23.48 percent in October and ahead of Android’s 21.9 percent share, slightly down on October’s figure of 22.11 percent.

  • sy69

    Why do quick to toss around the word “lies”?  Is it not possible to have a civil discussion here?

    Web hits != device sales.  Please review the article above.

    There are tremendous variances among counts of web usage, attributable to the differences in data collection methods, analysis methods, app usage vs web usage, clarity of user-agent strings, and more.

    For example, Nielsen shows very different usage patterns:
    http://www.androidpolice.com/2

    See also:

    GARTNER: Android Market Share Doubles, iOS Drops In Q3Android’s share of the worldwide smartphone market was 52.3% for Q3http://articles.businessinsi… Tops 50% Share of Smartphone Sales, But Apple Still Dominating Profitshttp://www.macrumors.co…
    As an Apple customer for 25 years and a shareholder for more than a decade, I applaud their many recent successes.

    But as an Apple fan looking at the long term, I would not encourage complacency.

  • ericthehalfbee

    300 million phones and 10 million are Galaxy SII’s. So what makes up the other 290 million? Oh yeah, some second tier smartphones, and boatloads of feature phones and dumb phones.

    Even funnier that Samsung says thanks to the success of phones like the GS2. Say what? A phone that comprises 3% of your total sales is to thank for your record sales of 300 million?

  • “fanbois”

    Idiot.

  • Andrew Vierling

    I think you guys take the “cult” thing a little too far. Can we get some sensible, intelligent debate instead of name calling?

    If Apple makes 5 times as much per phone than Samsung, that means they could cut their price significantly if they chose to. Tommy, I assume you understand that 99 cents is the subsidized price, right? The actual price is several hundred dollars. One of the author’s main arguments is that Apple is clearly great because they make so much money off of each phone. My point is that to me, charging less would be even greater. Further, allowing competition can only improve Apple’s products in the long run.

    Can I get an intelligent response to my argument?

  • Charlie_Magnus

    “Market share drives developer interest, which translates to apps, which
    translates to users.  Even though devs make more per app on iOS today,
    at the current rate of market share decline we can’t expect that to last
    forever.”

    As those who buy Apple products are better spenders in general, and not so sensitive to up and downs in the general economy, this is not likely to be true. If Samsung would pick up all those unwilling to spend on apps etc., that would only translate to hardware sold, not to other money from apps.

    Conclusion: it matters not only what number of users you get, but WHICH users. Some are more lucrative than others.

  • Charlie_Magnus

    “Can we get some sensible, intelligent debate instead of name calling?”

    If that is what you want, my suggestion is that you introduce yourself making intelligent and sensible posts. One can hardly say that is what you did above, tea party refererence and all.

  • sy69

    “Android’s operating system (OS) share of smartphone sales grew to
    command more than half of the U.S. smartphone market (53 percent) from
    January through October 2011, as Apple’s iOS share grew to reach 29
    percent of the market”
    https://www.npd.com/wps/portal

  • shm224 shm224

    That was certainly the case in NYC..  3-4 years ago, blackberry was all the rage, then came Apple’s iPhone. Now, I’m seeing a lot of Androids..

  • sy69

    Any other posters noticing the highly selective subset of replies that get approved here?

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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