Samsung made global headlines in November 2010 after bragging it had sold 600,000 Galaxy Tabs in its first month. It later claimed to have shipped 2 million of its tablet devices by the end of 2010, saying sales were "faster than expected."
Market research groups, including Strategy Analytics, Gartner and IDC, jumped on Samsung's reported tablet figures to contrast them with Apple's iPad and to suggest Android was winning significant market share in tablet sales.
Neil Mawston, a director at Strategy Analytics, declared at the time that "the Samsung Galaxy Tab was the main driver of Android success," noting that Android tablet shipments had jumped from just 100,000 in the previous quarter to 2.3 million in the winter quarter, almost entirely due to Samsung.
However, it's now clear that Samsung simply lied about how many tablets it was actually selling. Android tablets weren't successful at all, and Samsung's tablet sales weren't driving anything.
Samsung's lies first began to unravel early in 2011, when the company was forced to admit that the "sales" numbers it was reporting to the media were actually "sell-in" to fill channel inventory, not "sell-out" to actual buyers.
When asked for more information about how many Galaxy Tab units were actually being sold to end users, Samsung executive Lee Young-hee answered, "our sell-in was quite aggressive and this first quarterly result was quite, you know, fourth-quarter unit [figure] was around two million."
"Then, in terms of sell-out, we also believe it was quite smooth. We believe, as the introduction of new device, it was required to have consumers invest in the device. So therefore, even though sell-out wasn?t as fast as we expected, we still believe sell-out was quite OK."
Lee's comments were originally transcribed as "quite small," something that the company and its supporters quickly insisted was a mistake, saying that Samsung's actual tablet sell through to consumers wasn't "quite small," it was "quite smooth."
Steve Jobs quoted Samsung's "quite small" statement when introducing iPad 2, something industry pundits jumped upon as inappropriate and a misinterpretation of what Lee had actually said. As it turns out, however, Samsung's tablet sales were actually about a tenth of what the company was claiming.
Samsung's real sales were clearly "quite small." The company's sales are now a matter of public record, and according to the company's own filings, it only sold 262,000 Galaxy Tabs in the winter quarter of 2010, not two million.
Then, in 2011, Galaxy Tab sales collapsed. Throughout the year, the original 7 inch model only sold 77,000, then 133,000, then 92,000 and finally 102,000 in each quarter, totaling just 404,000 units the entire year.
Speaking to analysts in October 2010, Jobs had predicted that 7 inch tablets like the Galaxy Tab would fail, despite the tech media's giddy anticipation of the "avalanche of tablets poised to enter the market."
Jobs: 7 inch tablets will be DOA
"We think the 7 inch tablets will be dead on arrival," Jobs said, "and manufacturers will realize they're too small and abandon them next year. They'll then increase the size, abandoning the customers and developers who bought into the smaller format."
Jobs was dead on accurate. Samsung subsequently introduced 10" Galaxy Tab models at Mobile World Congress at the beginning of 2011, but after Apple introduced iPad 2, Samsung returned to the drawing board, noting, "we will have to improve the parts that are inadequate. Apple made it very thin."
Samsung later claimed that its redesigned Galaxy Tab was thinner than Apple'd iPad 2, before being caught in the lie by InformationWeek and unable to back up its claims.
However, Samsung's sales data shows that the company only sold a total of 133,000 of those larger tablets in the second quarter of 2011, then 201,000 in the third and 245,000 in the fourth quarter.
Source: Apple v. Samsung court documents
Samsung still hasn't sold 2 million Galaxy Tabs
Both sizes of the "accused tablets" combined sold a total of just 983,000 in 2011. This year, Samsung's sales of all Galaxy Tab models have imploded, selling just 193,000 across the first two quarters of 2012. To date, Samsung hasn't sold even 1.5 million Galaxy Tabs in two years.
In contrast, Apple sold 7.8 million iPads in 2010, and went on to sell 15.9 million more in 2011. It has sold another 27 million in the first three calendar quarters of 2012, 17 million in the last quarter alone.
Samsung's gross misrepresentation of its tablet sales is not just a credibility problem for the company, but also fires a huge hole through the numbers reported by market analysts who blindly run with them.
Strategy Analytics, Gartner, IDC and others for example, assigned Samsung significant tablet "market share" back in 2010 based on its announced shipments of 2 million Galaxy Tabs, deducting this "share" from Apple to arrive at the suggestion that the iPad maker was "only" responsible for around 77 to 83 percent of the tablets being sold.
In reality, Apple has sold virtually all of the tablets users have purchased.
No market for 7 inch tablets?
If Samsung actually shipped 2 million 7 inch Galaxy Tabs in 2010, and it has since only sold 725,000 of them in the last two years as its documented figures indicate, there should be an unsold inventory of 1.3 million mini-tablets out there, somewhere.
Combined with the fact that the only 7 inch tablets that are known to have sold in any quantity at all are Amazon's Kindle Fire and Google's Nexus 7, neither of which is capable of selling at a sustainable hardware profit, the market appears bleak for 7 inch tablets that function like stretched smartphones.