Galaxy Note 3 phablet accounts for just 1/10 of Samsung's 2013 premium phone sales

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  • Reply 61 of 136
    davidwdavidw Posts: 2,024member
    Quote:

    Originally Posted by zerobim08 View Post

     



    Apple 40% margin is for their entire range, isnt it?   Maybe if you just take 5/5s margin, it would be much higher than 40%.


    I doubt it. The newest phones (products) usually has the lowest margin. Specially if the new phones (products) have new features not found in the older ones. It's the older phones that have the higher margin because the RD that went into it have already been re-captured, they don't need to adverise it as much, and the older parts for it are cheaper. Even if they discount the older phones, I bet they will still have a higher or the same margin as a brand new product.  

  • Reply 62 of 136
    poksipoksi Posts: 482member
    Quote:

    Originally Posted by Frood View Post

     

     

    .... the iPhone 5s/5c are wildly unpopular failures....

     


     

    My greetings to the people of Mars! How are things over there? Still red? How's the water?

  • Reply 63 of 136
    poksipoksi Posts: 482member
    Quote:

    Originally Posted by zerobim08 View Post

     



    Samsung seems to be making lots of profit every quarter.  It is not so far off from what Apple is making.  Why less profit and more premium phones for Samsung.  Well, maybe same iteration Iphone year after year and are way overpriced and not value for money and Apple has a bigger profit margin.  Everywhere in world people are more discernible and they are not biting.  Maybe that's why iphone market share has been dropping continuously overseas.   In US, due to contract subsidy, the actual price of iphone is masked and is considered cheap at face value (but we know total cost is much higher).   Since Apple sells a huge proportion of its phone in the US, all it means is that more American are being fleeced by Apple than people outside of it.

     


     

    Wild guesses and misses....

     

    1. First of all, it is impossible to say, how much profits Samscrap really makes, because the mobile division can insource major components for undisclosed pricing and terms.

     

    2. iPhone market share is rising on many markets. Also in Germany, for example, where Android share is traditionally extremely high. It is normal that Apple had seen a market share drop, since they started with 100%. There wasn't a finger touch screen smartphone before. However, it shows already that market share erosion has stopped and they are even bouncing back on mature markets. However, they always lead by far when comparing overall market share with premium market share.

     

    3. iPhone sales number increase is caused heavily by direct sales and above all: sales without contract. Subsidized phones do not make the growth. I find this pretty amazing for "overpriced" phone, don't you?

  • Reply 64 of 136
    Well, if we ignore the usual ignorant people that will come here and say that the iPhone is shot and that the note 3 has better specs, we would still have a problem.

    I realize that a blogger doesn't have to be particularly gifted at statistics and math, but common sense is always imperative.

    If we do the math and realize that at least 3/10s of Samsung sales are s4 and note3,and then we add the numbers of the s4 mini, note 2,s3 and maybe s3 mini, while ignoring all those other models that Samsung sells, we reach a very big number.

    Then, if you want to believe that Samsung sells more than all other android oems together, we still get a number that is larger than all the iPhone being sold, on the high end alone.

    Of course, all of those models have screens bigger than the iPhone, most at 5",wich shows how stupid this article really is.
  • Reply 65 of 136
    Quote:

    Originally Posted by DavidW View Post

     

     

    If they're going to heavily discount the S4 before they release the S5, they better be sure that the S5 is worth that much more buying. Because if it isn't, then why would anyone pay that much more for it. All a heavy discount will do is cannibalize other phone sales, either the cheaper phones or the new one coming out. And Samsung sells phones in all price ranges. 

     

    And if you actually believe that Samsung margin in only 25%, then how much can they really discount it and you still call it a heavy discount, without losing money on every sale. But on the other hand, if they have to get rid of a ton of excess inventory due to way slower than expected sales, then I guess it might be the best thing to do. Even if it's going to eat into the new S5 sales.  


     

    Of course, when I said discount doesnt mean the phones are given away for free.  Price maybe discount 20-25% for the older phone and when the new phone launch it will be at the older phone price before discount.   Even the 5 was discounted quite a lot (with offers all over) before the 5s came out.  Same practice by other manufacturer as well.  I don't know why you want to debate on this.

     

     

    Quote:

    Originally Posted by DavidW View Post

     

    I doubt it. The newest phones (products) usually has the lowest margin. Specially if the new phones (products) have new features not found in the older ones. It's the older phones that have the higher margin because the RD that went into it have already been re-captured, they don't need to adverise it as much, and the older parts for it are cheaper. Even if they discount the older phones, I bet they will still have a higher or the same margin as a brand new product.  


     

    Then if this is true (which I am not so sure), it would apply to both Apple and Samsung as well.  However, all we know is the overall profit margin as reported is much higher for Apple than Samsung.  This is the only fact we know.  Any other postulations are just speculation.

  • Reply 66 of 136
    poksipoksi Posts: 482member
    Quote:

    Originally Posted by pedromartins View Post



    I realize that a blogger doesn't have to be particularly gifted at statistics and math, but common sense is always imperative.



    If we do the math and realize that at least 3/10s of Samsung sales are s4 and note3,and then we add the numbers of the s4 mini, note 2,s3 and maybe s3 mini, while ignoring all those other models that Samsung sells, we reach a very big number.



    Then, if you want to believe that Samsung sells more than all other android oems together, we still get a number that is larger than all the iPhone being sold, on the high end alone.

     

     

    Hell, yeah! Let's make all SG phones over and including 4" screen size a high end phones. Why stop with mini? Let's add some 20 models and variations if there are more!

     

    Apple has predicted such misguided comparisons and introduce 5C. SO, the comparison game, although stupid is 5c/5s versus S4/Note 3. The latter duo will sell much, much less.

  • Reply 67 of 136
    Quote:
    Originally Posted by poksi View Post

     

     

    Wild guesses and misses....

     

    1. First of all, it is impossible to say, how much profits Samscrap really makes, because the mobile division can insource major components for undisclosed pricing and terms.

     

    2. iPhone market share is rising on many markets. Also in Germany, for example, where Android share is traditionally extremely high. It is normal that Apple had seen a market share drop, since they started with 100%. There wasn't a finger touch screen smartphone before. However, it shows already that market share erosion has stopped and they are even bouncing back on mature markets. However, they always lead by far when comparing overall market share with premium market share.

     

    3. iPhone sales number increase is caused heavily by direct sales and above all: sales without contract. Subsidized phones do not make the growth. I find this pretty amazing for "overpriced" phone, don't you?


    1.  Go and read Samsung quarter report and it will tell you.  I doubt accounting practice allows the reporting of higher price than actually paid when it is sourced from another division of the same company.

     

    2.  Seems iphone share still is falling.

    http://www.tech-thoughts.net/2013/11/smartphone-market-share-by-country-q3-2013.html#.UqglFeUdhvk

    http://techcrunch.com/2013/11/12/windows-phone-android-gain-market-share-while-apple-slips-despite-growth-in-iphone-shipments/

     

    3. You got it all wrong.  40% iphone sales are in US which are subsidized.  And iOS has regained some grounds against Android in US.  In the rest of the world, sales has been slumping.

     

     

     

     

    Quote:
    Originally Posted by poksi View Post

     

     

    Hell, yeah! Let's make all SG phones over and including 4" screen size a high end phones. Why stop with mini? Let's add some 20 models and variations if there are more!

     

    Apple has predicted such misguided comparisons and introduce 5C. SO, the comparison game, although stupid is 5c/5s versus S4/Note 3. The latter duo will sell much, much less.




    From reports, the overly priced 5c itself maybe a bomb.  So you are left with 5s and the very much aged 4s to hold the fort..  

  • Reply 69 of 136
    davidwdavidw Posts: 2,024member
    Quote:
    Originally Posted by zerobim08 View Post

     

     

    Well, I'm not sure whether the 100mil S4 projection came from Samsung or analysts.  But 80mil is the current projection which I have used in my calculations.   You said in Aug 2013 it sold 5mil but that's a low month.  It is not too far-fetched that the 5mil can be maintained or improved over the peak months from from Nov - Feb.

     

    Looking at Samsung which reported sales volume/profit has been increasing y-o-y and q-o-q,  it just common sense that the QUANTITY of high-end phones sales would also increase in tandem (with some variance).  Otherwise it is just illogical that in one quarter Samsung sold high proportion of high-ends but suddenly in the next quarter the volume drops dramatically even though the overall volume has increased.


    I  believe it came from Samsung CEO himself during a press conference or company meeting. Samsung made the same mistake you're making. Only they did it much earlier with the S4 sales numbers. Because the S4 was the fastest selling phone in Samsung history, based on 2 months sales data, they figure that the S3 (the fastest selling phone by Samsung at the time) will surpass the S3 in units sold by a large margin. At the time the S3 sold over 60 million in a year it's been on sale and since the new S4 was selling 1.7 times as fast, they firgure the S4 would sell from 80 to 100 million, easily. But that didn't pan out as sales plummeted in the following months. At the rate it's going, there's a chance that the S4 might not even surpass the S3 one year sales numbers.

     

    http://www.zdnet.com/samsung-to-retire-the-galaxy-s3-early-cut-s4-production-7000017135/

     

     

    Samsung have been making up for the lower that expected sales in their high end phones by selling a lot and a lot and a lot (did I mention a lot?) of low end smart phones. No doubt low end smart phones are profitable, but Samsung most likely have to sell 2 or 3 of them to make the same profit as a high end smart phone. We don't have too speculate on this. If Samsung makes the same or nearly the same profit on their low end phones as their high end phones, then their overall profit would easily be 3 times that of Apple just based on how many more phones we know Samsung sells vs Apple. And we know that's not even close to the case.

  • Reply 70 of 136
    poksipoksi Posts: 482member
    Quote:
    Originally Posted by zerobim08 View Post

     

    1.  Go and read Samsung quarter report and it will tell you.  I doubt accounting practice allows the reporting of higher price than actually paid when it is sourced from another division of the same company.

     

    2.  Seems iphone share still is falling.

    http://www.tech-thoughts.net/2013/11/smartphone-market-share-by-country-q3-2013.html#.UqglFeUdhvk

    http://techcrunch.com/2013/11/12/windows-phone-android-gain-market-share-while-apple-slips-despite-growth-in-iphone-shipments/

     

    3. You got it all wrong.  40% iphone sales are in US which are subsidized.  And iOS has regained some grounds against Android in US.  In the rest of the world, sales has been slumping.

     

     

     

     



    From reports, the overly priced 5c itself maybe a bomb.  So you are left with 5s and the very much aged 4s to hold the fort..  


     

    1. No, it doesn't. It allows only transparent, market prices. But this is a grey area and some of the profits may always flow around sister companies when required. Actually, it is a pretty much standard procedure, especially with international companies. 

     

    2. No, it is not falling. Even from Gartner, which is the most Apple hostile source you can see that long term trend is totally steady, or Apple is even bouncing. You know perfectly well that slowly declining graph in last few months before releasing new iPhones while all others boasted fresh models is by all means not a general trend, so you are trolling.

     

    3. It is less than 40%, actually a little more than a third. And this was BEFORE China Mobile and NTT DocoMo. This was the reason why has Apple struggled with market share in those 2 big markets. As long as there are users with feature phones, there is a place to grow for SG. But after that, you will see the churn of many users to Apple. And they rarely go to Little Green Robot phones. Actually, this started to happen already.

     

    5C: Dream on. First 9 most sold phones in japan are now iPhones, most sold are actually 5C. And this is happening in country with big living standard. And even if 5C would be overpriced, for every 5C not sold, there is a 5S sold, not S4 or whatever. This is very far from failure, I would say. BTW: do you think phones are only subsidized in US? Are only iPhones subsidized? What kind of counterargument are you placing here, anyway?

     

     

    In any case, we will see the sales figures by the end of January and it will be again: but, but, but,...this is a surprise :)

  • Reply 71 of 136
    tmaytmay Posts: 6,238member
    Quote:
    Originally Posted by zerobim08 View Post

     

     

    Of course, when I said discount doesnt mean the phones are given away for free.  Price maybe discount 20-25% for the older phone and when the new phone launch it will be at the older phone price before discount.   Even the 5 was discounted quite a lot (with offers all over) before the 5s came out.  Same practice by other manufacturer as well.  I don't know why you want to debate on this.

     

     

     

    Then if this is true (which I am not so sure), it would apply to both Apple and Samsung as well.  However, all we know is the overall profit margin as reported is much higher for Apple than Samsung.  This is the only fact we know.  Any other postulations are just speculation.


    Apple has no competition from any company in the 4 inch or under category. There are essentially no premium smartphones other than Apple/s in that category.

     

    The reason for this is that the Android premium market was driven, as someone pointed out earlier, by the need for larger batteries to compete with Apple's benchmark for battery life, and larger than 4 inch screens were designed in at the same time. That has been a good strategy, but Samsung in its efforts to gain market share, overproduced the S4, the excess of which was marketed at lower ASP's that exposed Samsung to significant sales and marketing costs that exceeded $10B dollars. Apple may have lost some sales to the S and Notes, but Samsung also had to market against other premium flagships like LG and HTC. The result is a much lower ASP for its premium models than previous years.

     

    Samsung did sell more phones overall, but its premium devices collectively did not exceed the total number of iPhones that Apple sold. Now you have stated that Apple's mix isn't really all premium phones, yet all of Apple's pricing is at premium price points. The buyer's of Apple iPhone consider them premium devices, albeit a small percentage are not flagship performance.

     

    When Apple gives sales numbers for iPhones, they aren't broken down by model, but analysts can derive the ASP from the revenue and volume of sales. This is much more difficult for Samsung, but even using the best numbers, Samsung's marketing expense is some 10x of Apple's and the ASP for phones even in total volumes that Samsung sold/shipped did not support that same profit levels that Apple did, albeit some analysts tried to compare the two; see DED's post on that for the details.

     

    Bottom line is that you aren't really making your case.

     

    Should Apple deliver an additional large screen iPhone model next year, I would expect it to be a benchmark for the industry, just as the current iPhone 5S is the undeniable benchmark at 4 inch and below. Many would argue, as I would, that the iPhone 5S is already the benchmark for the industry, but being as though it isn't as large or feature rich as the collection of Android and WP competitors, others would disagree.

     

    What can be surmised is that any pent of desire for a larger iPhone model will be met with blockbuster sales, and I believe that this would cull the herd of premium Android devices, driving down ASP's even lower.

     

    But Android owns the lower end market, so keep pushing that meme.

  • Reply 72 of 136
    Quote:

    Originally Posted by poksi View Post

     

    Hell, yeah! Let's make all SG phones over and including 4" screen size a high end phones. Why stop with mini? Let's add some 20 models and variations if there are more!

     

    Apple has predicted such misguided comparisons and introduce 5C. SO, the comparison game, although stupid is 5c/5s versus S4/Note 3. The latter duo will sell much, much less.


    I think that you should apply to a school if you can't read.

     

    It is very fair to include the numbers of those s4 and s3 mini models, since Apple itself includes the numbers of iPhones that go as low as the 4. Just because the iPhone 4 (it is still being sold in China, right?) is so badly priced, it doesn't mean that those 2 Samsung models shouldn't be included.

     

    And who the hell do you think you are to decide witch comparisons we should make? The facts are clear:

     

    - Samsung alone sells the same number, close, if not more of high end smartphones than Apple.

    - All of them have bigger screens;

    - They make more money (or the same, at least for 1 or 2 more quarters) from phones than Apple, so their business is better/equal.

    - All of those high end phones from other OEMs have a bigger screen.

    - Bigger screens clearly outsell the iPhone.

     

    There's a huge market for such devices and Apple has been stupid, very stupid, very incompetent when they chose to not address it.

    And guess what, they are paying a huge price for it:

     

    - 0 growth in net profit (Actually, a small decline).

    - Samsung catch up in net profit.

  • Reply 73 of 136
    Quote:
    Originally Posted by zerobim08 View Post



    Extrapolate it will give 15mil note3 in a quarter. We know s4 sold 40 mil in two months so that's 20 mil per quarter. This give a total of 35 mil.



    Apple best quarter is when it sold 47 mil phones and roughly half of these are high ends (I.e 23.5 mil)



    With just 2 models in the premium range samsung still sold at least 50 percent more premium phones than apple.



    Looking at it straight on not a roundabout way gives a completely different picture than this article.

     

    If you want to count it that way, all *2* of Apple's current phone models are also "high ends" -- and I think "just" the 5S and 5C in Apple's "premium range" account for more than half Apple's iPhone sales; I don't think half of Apple's sales are iPhone 4S; please show the figures to that effect.

     

    Also, you are happy to "extrapolate" Samsung sales as though the sales will be consistent month after month, quarter after quarter. Oh? But, you can't extrapolate from Apple's best quarter? Apple's iPhone sales (absolute sales -- not necessarily rate of sales growth, or acceleration of growth) consistently grow YOY with a QOQ dip right after Christmas, and have done so for 7 years. And we now have China's largest carrier supplying the iPhone for the first time. And sales in Japan were particularly good recently...

     

    So, lots of positives for iPhone outlook, if you care to look -- none of which is requiring 14B in continued annual marketing spending (it would be sad if Samsung didn't sell 40M of each model).

     

    Oh, and the 5S alone has now reached a production run of about 500K per day!

     

    Hmmm, I guess you know something we don't! Maybe some good news about Samsung's premium phone sales that no-one else really knows, because Samsung still remains quite closed-lipped and opaque about their actual sales performances.

  • Reply 74 of 136
    poksipoksi Posts: 482member
    Quote:

    Originally Posted by pedromartins View Post

     

    I think that you should apply to a school if you can't read.

     

    It is very fair to include the numbers of those s4 and s3 mini models, since Apple itself includes the numbers of iPhones that go as low as the 4. Just because the iPhone 4 (it is still being sold in China, right?) is so badly priced, it doesn't mean that those 2 Samsung models shouldn't be included.

     

    And who the hell do you think you are to decide witch comparisons we should make? The facts are clear:

     

    - Samsung alone sells the same number, close, if not more of high end smartphones than Apple.

    - All of them have bigger screens;

    - They make more money (or the same, at least for 1 or 2 more quarters) from phones than Apple, so their business is better/equal.

    - All of those high end phones from other OEMs have a bigger screen.

    - Bigger screens clearly outsell the iPhone.

     

    There's a huge market for such devices and Apple has been stupid, very stupid, very incompetent when they chose to not address it.

    And guess what, they are paying a huge price for it:

     

    - 0 growth in net profit (Actually, a small decline).

    - Samsung catch up in net profit.


     

    Patronizing will not give you any credibility, it will make you funny, but not humorous.

     

    As you made yourself a list of high end phones, so did I, and who are you to tell me what is allowed to be compared or not. Therefore i don't include 4S, not to mention 4 in Apple high end, because they are ancient technology nowadays. On the other hand, your primary differentiator is obviously screen size, which is also funny. 

     

    The facts you listed are either wrong, wished or irrelevant. Direct comparison of the profits is also way off, since the have very different business model. TC said not so long ago that Apple is not in the junk business and there won't be cheap iPhone. The settle with by far largest price and profit per unit and even units sold are pretty big.

     

    Once there will all users have smartphones, Apple's market share will rise significantly. Not to mention impact of new carriers and larger screen version. Apple has arsenal waiting, while Sams has fired all the bullets in a short time.

  • Reply 75 of 136
    Quote:
    Originally Posted by DavidW View Post

     

    I  believe it came from Samsung CEO himself during a press conference or company meeting. Samsung made the same mistake you're making. Only they did it much earlier with the S4 sales numbers. Because the S4 was the fastest selling phone in Samsung history, based on 2 months sales data, they figure that the S3 (the fastest selling phone by Samsung at the time) will surpass the S3 in units sold by a large margin. At the time the S3 sold over 60 million in a year it's been on sale and since the new S4 was selling 1.7 times as fast, they firgure the S4 would sell from 80 to 100 million, easily. But that didn't pan out as sales plummeted in the following months. At the rate it's going, there's a chance that the S4 might not even surpass the S3 one year sales numbers.

     

    http://www.zdnet.com/samsung-to-retire-the-galaxy-s3-early-cut-s4-production-7000017135/

     

     

    Samsung have been making up for the lower that expected sales in their high end phones by selling a lot and a lot and a lot (did I mention a lot?) of low end smart phones. No doubt low end smart phones are profitable, but Samsung most likely have to sell 2 or 3 of them to make the same profit as a high end smart phone. We don't have too speculate on this. If Samsung makes the same or nearly the same profit on their low end phones as their high end phones, then their overall profit would easily be 3 times that of Apple just based on how many more phones we know Samsung sells vs Apple. And we know that's not even close to the case.


     

    This is just one analyst speculation.  But this was proven wrong at the end of Sep (3 months after this article) when Samsung announced S4 posted a healthy 40mil in just 6 months which is like 7 mil monthly.  All these doomsayers have been blacked faced.   On more recent articles, I don't see any of these analysts still uses the 60mil figure which means a 3.3 mil per month for next 6 months which more is than 50% drop from avg figure for the previous 6 months.  This is highly improbable given overall sales volume/profit has be going up.  

     

     

    Quote:
    Originally Posted by tmay View Post

     

    Apple has no competition from any company in the 4 inch or under category. There are essentially no premium smartphones other than Apple/s in that category.

     

    The reason for this is that the Android premium market was driven, as someone pointed out earlier, by the need for larger batteries to compete with Apple's benchmark for battery life, and larger than 4 inch screens were designed in at the same time. That has been a good strategy, but Samsung in its efforts to gain market share, overproduced the S4, the excess of which was marketed at lower ASP's that exposed Samsung to significant sales and marketing costs that exceeded $10B dollars. Apple may have lost some sales to the S and Notes, but Samsung also had to market against other premium flagships like LG and HTC. The result is a much lower ASP for its premium models than previous years.

     

    Samsung did sell more phones overall, but its premium devices collectively did not exceed the total number of iPhones that Apple sold. Now you have stated that Apple's mix isn't really all premium phones, yet all of Apple's pricing is at premium price points. The buyer's of Apple iPhone consider them premium devices, albeit a small percentage are not flagship performance.

     

    When Apple gives sales numbers for iPhones, they aren't broken down by model, but analysts can derive the ASP from the revenue and volume of sales. This is much more difficult for Samsung, but even using the best numbers, Samsung's marketing expense is some 10x of Apple's and the ASP for phones even in total volumes that Samsung sold/shipped did not support that same profit levels that Apple did, albeit some analysts tried to compare the two; see DED's post on that for the details.

     

    Bottom line is that you aren't really making your case.

     

    Should Apple deliver an additional large screen iPhone model next year, I would expect it to be a benchmark for the industry, just as the current iPhone 5S is the undeniable benchmark at 4 inch and below. Many would argue, as I would, that the iPhone 5S is already the benchmark for the industry, but being as though it isn't as large or feature rich as the collection of Android and WP competitors, others would disagree.

     

    What can be surmised is that any pent of desire for a larger iPhone model will be met with blockbuster sales, and I believe that this would cull the herd of premium Android devices, driving down ASP's even lower.

     

    But Android owns the lower end market, so keep pushing that meme.


     

    So a 4 or 4s which are given "free" on contract are considered a more premium phone compared to S4/S3 which are not free?  What kind of logic is this?  

     

    Why care about the micro details (like ads spending etc)?  Given that overall Samsung smartphone volume/earning is growing faster than Apple and those records sales of high ends should have an impact.  You are naive to not think so.

     

    If Apple comes out with a larger screen phone, that's 1 year down the road.  Who knows what kind of phone Samsung can come out with 1 year from now.  

  • Reply 76 of 136
    Quote:

    Originally Posted by poksi View Post

     

    Once there will all users have smartphones, Apple's market share will rise significantly. Not to mention impact of new carriers and larger screen version. Apple has arsenal waiting, while Sams has fired all the bullets in a short time.


    I'm not going to address the rest of your post because it would be a clear waste of time.

     

    About this bit... Of course Apple is the innovative company, the one that changes things. But don't be foolish to believe that  " Sams has fired all the bullets in a short time". Curved displays, 4k, more cores, more ram, more features... Samsung won't stop.

     

    Apple doesn't need to have another iPhone line to survive, I'm not stupid. In fact, Apple doesn't need another iPhone line to stay insanely wealthy, but that's not the point.

     

    Do they want more? Do they want more money and growth? Do they want to make a better iPhone (for many)? Do they want to address the other half of the premium segment that clearly despises iPhones because they have smaller screens, despite being better overall?

     

    Of course they want, it's just that they underestimated how quickly Samsung grew. That's 15 billion in advertising for you.

     

     And again, as demonstrated by the price of the 13" cmbp, iphone 4 and 4s, iPad mini, ipad 2, mac mini... Apple would sell toilets if they could have 40 % margins in them.

     

    Don't get me wrong, if you have the brains to develop very smart designs and processes to reduce costs and improve quality, invest and change industries for the better, and have the best product, you deserve those margins, if not more. I love the 5s. But those products i mentioned... Oh boy.

  • Reply 77 of 136
    davidwdavidw Posts: 2,024member
    Quote:

    Originally Posted by zerobim08 View Post

     

     

    Of course, when I said discount doesnt mean the phones are given away for free.  Price maybe discount 20-25% for the older phone and when the new phone launch it will be at the older phone price before discount.   Even the 5 was discounted quite a lot (with offers all over) before the 5s came out.  Same practice by other manufacturer as well.  I don't know why you want to debate on this.

     

     

     

    Then if this is true (which I am not so sure), it would apply to both Apple and Samsung as well.  However, all we know is the overall profit margin as reported is much higher for Apple than Samsung.  This is the only fact we know.  Any other postulations are just speculation.


    But  Apple was going to discontinue the 5 after the 5c/5s comes out. They sold off what little inventory remained to make room for the 5c. As far as I know the Galaxy S3 is still for sale. Even the S2 is still for sale. Or at least some versions of them. And it's been one and half year since they introduced the S3. Maybe if they had discontinue it or a least not offered it at a heavy discount for so long, the S4 sales wouldn't be as low as they are. Figure many don't see any real value of paying more for the S4 and will wait for the S5. 

     

     

    I hate to make you look less inform than you're already making yourself to be, but that 40% number is not Apple profit margin, it's Apple average gross margin. Big difference. Samsung Electronics has a gross margin of about 39% (google it) and Samsung Mobile division represent 2/3's of it's revenue. The profit margin for Samsung Corp. is anywhere from 19% to 23%. Apple, Inc. profit margin is also in the low 20's when all the other expenses of running a company is factored in. (Taxes and rent for example). Profit margin is calculated by deducting  ALL the cost of running a company from it's revenue. Gross margin is calculated by deducting only the cost of making and selling a product from how much revenue it brings in. The profit margin is one number. However, the average gross margin is composed many numbers. Each product has it's own gross margin. Some are high, some are low. The number reported by Apple (and other companies) is an average. Apple do not break down the gross number of each product.  

  • Reply 78 of 136
    poksipoksi Posts: 482member
    Quote:

    Originally Posted by pedromartins View Post

     

    I'm not going to address the rest of your post because it would be a clear waste of time.

     

    About this bit... Of course Apple is the innovative company, the one that changes things. But don't be foolish to believe that  " Sams has fired all the bullets in a short time". Curved displays, 4k, more cores, more ram, more features... Samsung won't stop.

     


     

    Very smooth, way to go! :D  No answer at hand, so it must be a waste of time for a genius like you on a illiterate like me, right?

     

    But I agree with you on this one: more features.... What you listed are hardware and features, innovation is when you bundle those into a whole new product or product functionality that makes the change of how and for what device is used. Fingerscan on 5s is therefore not an innovation in my eyes. 

     

    The point is that such "innovations" are coming out continuously and their purpose will not change: it's a characteristics war and Sammy got the share of crowd who takes that. There will be no more. 

  • Reply 79 of 136
    Quote:
    Originally Posted by zerobim08 View Post

     



    Apple 40% margin is for their entire range, isnt it?   Maybe if you just take 5/5s margin, it would be much higher than 40%.


     

     

    Oh boy. You really don't know how the margin works, do you? As a matter of fact, older iPhones get higher margins! That's why Apple warns in quarterly calls that margins will drop due to new products coming out!

     

    It's about lowering the cost per unit, and that only happens on popular items that continue to sell. Here's how it basically works:

     

    First, Apple kind of says, "we'd like to go for 30-35 percent margins on all our products; that gives us comfort knowing that we can continue to run a viable company and develop the products and services in the way people have come to expect."

     

    So, with that in mind, Apple develops a new iPhone, say, with a new case, etc. It's in the works a couple of years and there are one-time development costs, plant and assembly line equipment to invest in, etc. (this is separate from component costs, which Apple also does well with through economies of scale)

     

    Having established historic price points and done their market research etc., Apple says, you know, we'd like to think we could sell 100M of this particular phone model in a year or 18 months [kind of like Samsung said about its phones]. We hope they are that popular. If we can sell the projected 100M, we can make all these one-time costs back while still retaining the basic margin we are shooting for.

     

    But, guess what, Apple not only sells more than 100M of that model in its first year... but a given iPhone model actually continues to sell well for multiple years! Who'd a thunk it! Therefore, the cost per unit, over time, comes down and down -- because all the fixed costs were amortized over just the first 100M units. You make more of something, each unit is cheaper to produce when your total costs for the whole life of the product are added up -- that's common business sense.

     

    So, Apple can lower the price of older iPhones by 100 dollars, and still make more margin on them! Because each phone model is so popular it sells more than 100M units (or whatever). Far from being an indication of Apple's greed, this is actually a testament to the huge success and popularity of each iPhone! People still buy the iPhone 4S because it is a good product; and Apple didn't expect to sell so many! (For one thing, you could put iOS 7 on the 4S the day iOS 7 was released by clicking a button, give the thing a new lease of life -- yeah, real greedy of Apple. I'll be using my 4S through 2014.)

     

    This is where Samsung and everyone else would love to be, but don't have the balls and focus to commit to refining just a couple of products -- they have to throw things against the wall to see what sticks; and they have to rinse and repeat every six months to stay above water. They have to sell at low margins because they are competing on price, not differentiation. They can't make better margins -- no-one would buy the product. It's a race to the bottom, as in PCs.

     

     

    [BTW, when comparing specs on paper, you can do a little better than just comparing pixel count on cameras, for example. Comparing Megapixel count is like comparing number of doors between car models. Yep, a four-door car is always better than a two-door car! LOL

     

    You could look at lens specs, lens quality and materials, pixel density on capture chip (and therefore color, reduced noise and better picture quality of resulting images, etc), color space, image capture and processing software, etc. Photos from the iPhone are consistently judged to be the best, and account for quite a majority of Flikr and Twitter and other online photos.]

  • Reply 80 of 136
    tmaytmay Posts: 6,238member

    My readings are that Samsung's mobile margins are 17% to 19%, driven down by the product mix and marketing and sales cost. Semiconductor profits increased primarily due to increased sales of non volatile memory. Not seeing the 40% margins, but even then, Samsung Electronics profits were less than Apple's.

     

    Interestingly, only some mid 50's percentage of Apple's profits came from iPhones, while 2/3 of Samsung Electronics came from mobile, albeit Samsung had to ship a lot of phones/tablets at all price points to get there. Considering the massive marketing push that Samsung paid for, I suspect that margins will be falling much quicker than Apple's iPhone margins.

     

    It's very hard to compare the two companies as Samsung is much more vague on sales number.

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