Apple vs. Samsung docs reveal Galaxy Tab was a flop and Samsung knew it

Posted:
in iPad edited April 2014
Top secret sales data revealed during the Apple vs. Samsung trial this week shows that Samsung knew that the Galaxy Tab sales figures (and overall Android tablet sales) it and various market research groups had fed to the media were not even remotely true.

Galaxy Tab


Over the past three years, IDC, Gartner and Strategy Analytics have generated data on the global tablet market which specifically conveys the idea that Apple's iPad business has been dropping into minority market share while Samsung and other Android tablet makers have been shipping astronomical millions of units.

Samsung's internal documents indicate that the company's own public representation of its competitive position in the tablet market was not true, and that the company appears to have intentionally misled its own investors and the analysts covering its business with false statements about the health of its tablet sales.

Android 39% of Tablets 2012


A slide (above), from Samsung's June 2011 chief executive presentation on the 2012 market, presented the company's understanding of the tablet market as increasing from 10.4 million in 2010 to 28.3 million in 2011 and estimated 41.2 million in tablet sales for 2012.

But of the Total Addressable Market, Samsung portrayed all Android devices as being a minority in the tablet market dominated by Apple's iOS iPad. For 2012, Samsung's data estimated that Android would make up 39 percent of the tablet TAM. In terms of dollar revenue, Apple's iPad market share was even higher, reflecting real world results in the form of profits earned.

Samsung's U.S. Galaxy Tab sales were even behind the Nook

A second "top secret" Samsung document from February 2012 (below) detailed the "strong competition from both the high end iPad and low tiered [Amazon Kindle} Fire/[B&N] Nook" in the U.S. market. In tablet units, Samsung spelled out Galaxy Tab quarterly sales in the low hundreds of thousands, adding up to total 2011 U.S. Tab sales of around 1 million.

Samsung made a sliver of tablet unit sales and revenue in 2011


Samsung contrasted Apple's 2011 U.S. sales of 17.4 million iPads, Kindle Fire sales of 5 million units, and 1.5 million Nook sales. That means Samsung itself knew it was selling fewer Galaxy Tabs than even the low end Nook, an embarrassing fourth place sales position one wouldn't expect from the world's leading electronics company with top volume sales in other mobile devices.

Samsung's tablet sales were behind the entry level attempts of a couple of bookstores to bang out a tablet device they could sell as a way to develop a market for ebooks. And Samsung not only had a year head start over them in building Android tablets, but also had a decades long legacy of building Windows tablets and all kinds of other hardware.

Samsung wasn't on the ball

Globally, Apple sold over 32 million iPads in 2011, so Samsung's U.S. iPad numbers indicate that just over half of those were sold in the U.S. that year. Those 32 million iPads were also larger than the total number of tablets (28.3 million) Samsung had expected everyone to sell globally in 2011 in a document from the middle of that year.Samsung's tablet sales were behind the entry level attempts of a couple of bookstores to bang out a tablet device they could sell as a way to develop a market for ebooks

Samsung wasn't just unable to make a tablet device that consumers wanted to buy; it was actually asleep at the wheel, failing to fully respond to the iPad in part because its leadership didn't even anticipate how quickly the market for iPads was increasing.

In terms of revenue, Samsung was also well aware that Apple's iPad was eating everyone's lunch, collecting over $10 billion in iPad U.S. revenues that year while Samsung earned less than $560 million on its own tablet sales, nearly half as much as Amazon brought in (and then lost) during just during the winter quarter alone. Even the low priced Nook was beating Samsung in both tablet unit sales and in revenues.

Samsung's "quite smooth" tablet data spread by "researchers"

In early 2011, IDC's Loren Loverde made headlines by contradicting Steve Jobs' contention that iPad had claimed 90 percent of the tablet market in its first year. Instead, IDC insisted that Samsung by itself had taken a 17 percent share of the tablet market in the final quarter of 2010, based on Samsung's announcement that it had shipped 2 million Galaxy Tabs.

Neil Mawston, a director at Strategy Analytics, also repeated Samsung's 2 million figure for winter quarter 2010 tablet shipments, announcing that "the Samsung Galaxy Tab was the main driver of Android success," because it made up 2 million of the 2.1 million tablets that were said to have shipped with Android. Virtually all of them!

Strategy Analytics also assigned Samsung a 22 percent share of the entire tablet market, somehow reaching a different number than IDC even though both were working with just two significant numbers: Apple's officially reported iPad sales and Samsung's double-speak mumbling of an evasive answer given to analysts during an earnings call.

However, as the Wall Street Journal later reported, Samsung's "2 million" number for 2010 was merely shipments of initial inventory sell-in designed to fill the channel, not actual sales to actual buyers, a concept that has a casual nexus with the idea of a "market" one could have "share" in.

That 2 million figure was presented during Samsung's quarterly earnings call with investors, making the "quite smooth" slip not just misinformation for blogs to repeat, but a deception of the company's investors that led them to think that Samsung was enjoying strong tablet sales when it wasn't.

In fact, over the next year Samsung's entire U.S. tablet sales were on par with other major flops such as Microsoft's Zune and Surface, or Google's Honeycomb tablets, Google TV or Chromebook Pixel.

And as Samsung itself depicted in the above chart, it knew internally that in 2010, the full range of iPad competitors were barely a blip, rather than Samsung alone having the 17 to 22 percent share market researchers had advertised.

Galaxy Tab 2011 sales


Previous Samsung tablet sales documents (above) which leaked during the first trial in 2012 harmonize with the U.S. numbers Samsung presented in the documents above: across all of 2011, Samsung sold just under 1 million tablets in the U.S.

A White Box in the Bermuda Triangle

None of the major market research firms appear to have issued U.S. market share data for tablet sales since the iPad was released, preferring to instead publish global market figures that incorporate vast numbers of "white box" devices built by unnamed "other" companies in unspecified markets. This is a marked departure from their PC industry reports, which detail both U.S. and global sales.

Tim Cook


However, as noted by Apple's chief executive Tim Cook, there is no evidence among web usage stats or app sales that support the idea that vast numbers of unbranded tablets are eclipsing the iPad globally. Instead, iPad shows up in web logs as making up an astounding 84 percent of all tablet traffic.

"If there are lots of other tablets selling," Cook said on the subject, "I don't know what they're being used for. Because that's a pretty basic function: web browsing."

Instead, there is strong evidence supporting the idea that Apple's iOS continues to dominate as a mobile device platform, including Microsoft's decision to release Office as an exclusive title for the iPad first.

It also calls into question why IDC, Gartner and Strategy Analytics seem to carefully avoid mention of U.S. market share figures that would provide valuable insight into the domestic market for mobile apps and accessories and illuminate the threat iPads might pose to conventional PCs.

It certainly appears that these market researchers, just like every Android tablet manufacturer, doesn't want to talk about specifics because the facts have nothing good to say about the Android or Windows platforms that indirectly pay the bills of said market research groups.
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Comments

  • Reply 1 of 190
    freerangefreerange Posts: 1,594member
    It just goes to show what we all already know, Apple rocks! The rest are just business hacks.
  • Reply 2 of 190
    "Galaxy Tab quarterly sales in the low hundreds of millions"!!!!
  • Reply 3 of 190
    singularitysingularity Posts: 1,328member
    So if the tab range was a complete disaster and selling an embarrassing amount in the US then by showing it isn't Apple undermining their own argument on how it has lost billions in profit and irreparable harm?
  • Reply 4 of 190
    rampramp Posts: 1member
    Yup. Apple never markets a dud. Oh wait...

    Twentieth Anniversary Macintosh
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  • Reply 5 of 190

    > In fact, over the next year Samsung's entire U.S. tablet sales were on par with other major flops such as Microsoft's Zune and Surface, or Google's Honeycomb tablets, Google TV or Chromebook Pixel.

     

    Only DED can out such gems !

     

    Hat tip Sir !

  • Reply 6 of 190
    Dan_DilgerDan_Dilger Posts: 1,583member
    Quote:

    Originally Posted by singularity View Post



    So if the tab range was a complete disaster and selling an embarrassing amount in the US then by showing it isn't Apple undermining their own argument on how it has lost billions in profit and irreparable harm?

     

    Apple wants Samsung to stop using its technologies and designs. The lawsuit is an attempt to stop Samsung, or at least attach a price to stealing so it will slow down or stop. Apple has to argue that it has lost profits and/or that Samsung should be dinged for profiting illegally from Apple’s work. That’s how the patent system and courts work.  

  • Reply 7 of 190
    supaflysupafly Posts: 15member

    I hope that was a joke.

  • Reply 8 of 190
    thepixeldocthepixeldoc Posts: 2,257member
    Thanks again DED for a well researched post.

    This question stands out for TL;DR crowd:

    [QUOTE]It also calls into question why IDC, Gartner and Strategy Analytics seem to carefully avoid mention of U.S. market share figures that would provide valuable insight into the domestic market for mobile apps and accessories and illuminate the threat iPads might pose to conventional PCs. [/QUOTE]

    I wonder if the bloggers and analytic teams also realize, that by their coercive misrepresentation of the markets, they may very well wake up some day and find their hero companies bankrupt. Thus depriving themselves of the very devices that they so desire and dote upon endlessly. You can't subsidize a product endlessly, losing millions in the process.

    Denying the truth of the markets is dangerous, even if you're in the business of manipulating them. Allowing them to be manipulated is criminal.

    Again, I don't understand Samsung's competitors in the PC/Android market why they are so docile in pointing out the unfair advantage that a convicted cheater is allowed to continue to harm their businesses. They have the most to lose in this fight, not Apple.
  • Reply 9 of 190
    thepixeldocthepixeldoc Posts: 2,257member
    supafly wrote: »
    I hope that was a joke.

    No... that voice in your head telling you that your nothing more than a worthless troll... is real! :smokey:
  • Reply 10 of 190
    supaflysupafly Posts: 15member

    This just goes to show that the perception of Android owning 80% of the smartphone market is a complete and utter lie. How can an OS with that much share have such low usage numbers? And no, I don't buy that bullsh*t argument of Android users changing their browser identifier or not using their phones to surf the web, that's nonsense!

  • Reply 11 of 190
    supaflysupafly Posts: 15member

    Well done DED. Its time someone called out Samsungs lies!

  • Reply 12 of 190
    supaflysupafly Posts: 15member
    Quote:

    Originally Posted by ThePixelDoc View Post





    No... that voice in your head telling you that your nothing more than a worthless troll... is real! image

    You're a complete and utter moron! If you had a brain cell it would die of loneliness.

  • Reply 13 of 190
    sflocalsflocal Posts: 5,728member
    Quote:
    Originally Posted by ThePixelDoc View Post





    No... that voice in your head telling you that your nothing more than a worthless troll... is real! image

     

     

    Quote:
    Originally Posted by Supafly View Post

     

    You're a complete and utter moron! If you had a brain cell it would die of loneliness.




    Alright kids... to the corner... both of you!  It's Time-Out for you two!

  • Reply 14 of 190
    sflocalsflocal Posts: 5,728member

    Those years of Fandroid sheeps giving wonderful praises to their Samsung overlord, while knowing the Galaxy tablets were complete trash.



    All the stores I walk into that have Galaxy Tabs show them gathering dust, not working, and simply just neglected.  The saddest ones are at the Costco stores in my area.  They place them fairly close to the entry of the warehouse, and each time I pass by it, not a soul in the area.



    It's bad enough that Samsung tries to lie to everyone about it.  We know that's the only thing they do best.  What's really sad and pathetic, not to mention shameful, are the Fandroid kook-aid drinkers that always thought Samsung was the best-of-the-best.



    How's that humble-pie tasting?

  • Reply 15 of 190
    gatorguygatorguy Posts: 23,165member
    Apple wants Samsung to stop using its technologies and designs. The lawsuit is an attempt to stop Samsung, or at least attach a price to stealing so it will slow down or stop. Apple has to argue that it has lost profits and/or that Samsung should be dinged for profiting illegally from Apple’s work. That’s how the patent system and courts work.  

    If as you say Samsung isn't selling them anyway, they're only dust magnets, where's the loss to Apple or the profit to Samsung they want a piece of?

    /s
  • Reply 16 of 190
    Happy with my Note 10.1
  • Reply 17 of 190

    ^most trolls don't have the sense to use the sarcasm tag. You seem to have progressed far enough to acknowledge your trolling.

  • Reply 18 of 190
    It's ironic Apple is so obsessed with looking back. Once they did the opposite.
  • Reply 19 of 190
    supafly wrote: »
    This just goes to show that the perception of Android owning 80% of the smartphone market is a complete and utter lie.

    IDC claims that there were 284 million smartphones shipped last quarter.

    But the only manufacturer that gives any number is Apple.

    From IDC's website:

    IDC's Worldwide Quarterly Mobile Phone Tracker® is built on the foundation of IDC's network of country-level mobile phone tracking services, and its bottom-up methodology delivers an accurate view of the mobile phone market from those closest to it.

    Can they be trusted? Who knows. Don't they get paid for their data?

    I think IDC tracks tablets as well... but we see what happens when a company actually presents their numbers...

    supafly wrote: »
    How can an OS with that much share have such low usage numbers? And no, I don't buy that bullsh*t argument of Android users changing their browser identifier or not using their phones to surf the web, that's nonsense!

    I think part of the problem is that any phone that runs a version of Android gets counted in these numbers.

    That includes flagship Android phones.... and the ultra-cheap Android phones sold in parts of the world that barely have internet. Those low-end phone are replacing flip-phones and might only be used for voice and text.

    I actually do believe that there are "smartphones" out in the world that run some version of Android but don't surf the web too much. So if you consider that... Android's market share looks less impressive.

    It could be that 8 out of 10 smartphones sold today are running Android... that would be the 80% market share.

    BUT... it could be that only 2 out of those 8 are actually used for apps and internet. Who knows.

    There's obviously something going on, though.

    That might explain why developers still focus on making apps for the iPhone with its 17% market share... while ignoring Android's 80% market share.

    Clearly that 80% isn't all it's cracked up to be. It might a big number on paper... but it doesn't get the results.
  • Reply 20 of 190
    rogifanrogifan Posts: 10,669member
    Apple wants Samsung to stop using its technologies and designs. The lawsuit is an attempt to stop Samsung, or at least attach a price to stealing so it will slow down or stop. Apple has to argue that it has lost profits and/or that Samsung should be dinged for profiting illegally from Apple’s work. That’s how the patent system and courts work.  
    Ah, so Apple doesn't really believe they're owed billions due to lost sales but they have to argue it that way because that's how patent trials work?
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