Samsung shipped 2x as many phones as Apple, earned half as much

Posted:
in iPhone edited May 2014
While Samsung itself does not report unit shipments, estimates from a closely positioned marketing company indicate that it shipped 89 million phones in the March quarter, nearly 20 million more than the year ago quarter, despite earning less money this year, and half as much as Apple.

Samsung logo


Strategy Analytics reported that Samsung increased its phone shipments from 69.4 million units in the year ago quarter to 89 million, but Samsung itself just reported earning 3.3 percent lower profits for the quarter compared to the previous year.

Samsung Electronics blamed disappointing sales of both flat screen displays and high end smartphones for its dip in operating profits, which totaled 8.5 trillion South Korean won ($8.2 billion). The company also reported a favorable increase in profits from its System LSI chip foundry.

Apple is a major customer of Samsung Electronics's Device Solutions (for components including displays and fabrication of Apple's chips), and a primary competitor to Samsung's Mobile group, which builds phones, tablets, netbooks and PCs.

Samsung Mobile reported profits of 6.43 trillion won ($6.2 billion), down 1.2 percent from 6.51 trillion won in profit a year earlier. For the same quarter, Apple reported more than twice as much operating income, $13.6 billion, an increase of 8.24 percent over the year ago quarter.

Compared to the entirety of Samsung Electronics, Apple reported holding 2.8 times as much cash, while its cash flow from operations was $13.5 billion, compared to 2.21 trillion won ($11.8 billion) for all of Samsung Electronics.

Warnings and subterfuge in 2013

Samsung has been warning investors for more than a year of fading profits and increased competition. In January 2013, the company stated, "the furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition, compounded by a slew of new products."

Throughout the year, Samsung continued to note to its investors that sales of its premium smartphone were flat and that its shipment volume growth was "led by increased sales of mass-market models," phones like the Galaxy Y--a 3G-only Android 2.x phone with an ARMv6 chip, 290MB of RAM, a 2MP camera and a 3 inch, 240x320 screen--specifications inferior to Apple's obsolete iPhone 3G from 2008.

Galaxy Y


Last July, Strategy Analytics issued a widely syndicated press release that claimed Samsung had overtaken Apple in mobile profits, a claim that was simply not accurate.

Despite Samsung's own warnings of flat premium phone sales in its earning reports, Strategy Analytics Executive Director Neil Mawston continued to issue statements which suggested that nothing was wrong, reports that were broadly syndicated by sites like CNET.

"While shipments of the flagship Galaxy S4 model softened," Mawston stated in October, "solid demand for the new Note 3 phablet and for mass-market devices like the Galaxy Y helped to lift Samsung's volumes."

A focus on volume

Six months ago, Strategy Analytics was similarly focusing attention on market share numbers, noting that "Apple grew just 26 percent annually during Q3 2013, which is around half the overall smartphone industry average of 45 percent," effectively equating Samsung's "mass market" Galaxy Y with Apple's iPhone 5.

Today, the firm again drew exclusive attention to volume and market share, stating that "Apple grew a below-average 17 percent annually and shipped 43.7 million iPhones worldwide for 15 percent marketshare in Q1 2014, falling from the 17 percent level recorded during Q1 2013. Apple remains strong in the premium smartphone segment, but a lack of presence in the entry-level category continues to cost it lost volumes in fast-growing emerging markets such as Latin America."

SA Q1 2014


However, according to Strategy Analytics' own estimates, Apple's addition of 6.3 million new iPhone sales in the March quarter was better than both Huawei (3.4 million new sales) and Lenovo (4.9 million new sales), the only other companies the firm detailed shipment numbers for in its report.

Strategy Analytics' latest press release makes no mention of profits.
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Comments

  • Reply 1 of 66
    I'd be worried if Samsung represented a compelling ecosystem.

    Amazon taking a loss or lower profits... but gaining CC# and amazon prime subscription memberships... capturing eyeballs and wallets.

    Samsung is a purchase cycle or 2 away from irrelevance. 1.5,3,7 years (phones, tablets/laptops, TVs/monitors). Their only compelling mass market (less tech geek) value is screen size vs price as far as I can tell... Profits in this model become a race to the bottom.

    Apple isn't playing that game.
  • Reply 2 of 66
    Samsung - Buy one get one free. Ya. Twice as many Samsung phones shipped as Apple SOLD. Makes sense.
  • Reply 3 of 66
    stefstef Posts: 87member
    And Samsung has a hundred times more Korean workers than does Apple. Pure mathholery.
  • Reply 4 of 66
    hydrhydr Posts: 146member

    Fool me once - shame on me. Fool me twice no phone from Samsung again. 

  • Reply 5 of 66
    rogifanrogifan Posts: 10,669member
    Samsung - Buy one get one free. Ya. Twice as many Samsung phones shipped as Apple SOLD. Makes sense.
    yep just saw a Verizon commercial last weekend for the GS5 where they were offering BYGO. And another carrier (might have been AT&T) offering a free Galaxy tab with the purchase of a GS5.
  • Reply 6 of 66
    MacProMacPro Posts: 17,868member
    I'd be worried if Samsung represented a compelling ecosystem.

    Amazon taking a loss or lower profits... but gaining CC# and amazon prime subscription memberships... capturing eyeballs and wallets.

    Samsung is a purchase cycle or 2 away from irrelevance. 1.5,3,7 years (phones, tablets/laptops, TVs/monitors). Their only compelling mass market (less tech geek) value is screen size vs price as far as I can tell... Profits in this model become a race to the bottom.

    Apple isn't playing that game.

    Exactly, Scamsung should think about moving into Mattel type toys soon. I can see a massive way of selling their unsold crap that way.
  • Reply 7 of 66
    dimmokdimmok Posts: 359member

    Samsung = Garbage

  • Reply 8 of 66
    Quote:

    Originally Posted by Stef View Post



    And Samsung has a hundred times more Korean workers than does Apple. Pure mathholery.

    i don't know how samsung does it. but creating the manufacturing process for extra 40million devices is not an easy job. in term of manufactures' efficiency, quality control, and build integrity, it is almost impossible to make it. further, things are not that simple if samsung keeps opening new manufacturing factories. at certain level, just adding new plants and hiring new workers might not help.

  • Reply 9 of 66
    wigbywigby Posts: 686member

    This headline sums up the Samsung - Apple relationship completely. Of course pure profits are more important than pure marketshare but there is a tipping point. At some point (under 5% for PCs) developers and industry allegiance begin to pull away completely from your ecosystem as Apple found in the mid-nineties. I never want to be an iOS user looking over the fence and seeing so many more apps and accessories available for Android just as they looked at iOS a few years ago.

     

    iOS has a long way to go before developers begin to look elsewhere but there are some very early signs of developers now embracing Android and iOS together.

  • Reply 10 of 66
    etsleeetslee Posts: 18member
    Doubt Apple will ever compete for low cost low margin phone. Let Samsung and Amazon fight for those dwindling dollars.
  • Reply 11 of 66

    Silver is Silver.

    White Gold is not even close.  

  • Reply 12 of 66
    slurpyslurpy Posts: 5,085member
    Quote:

    Originally Posted by wigby View Post

     

    This headline sums up the Samsung - Apple relationship completely. Of course pure profits are more important than pure marketshare but there is a tipping point. At some point (under 5% for PCs) developers and industry allegiance begin to pull away completely from your ecosystem as Apple found in the mid-nineties. I never want to be an iOS user looking over the fence and seeing so many more apps and accessories available for Android just as they looked at iOS a few years ago.

     

    iOS has a long way to go before developers begin to look elsewhere but there are some very early signs of developers now embracing Android and iOS together.


     

    Speaking in pure #s, Android is obviously a majority, yet developers still overhwelmingly favor iOS in terms of app development. There's nothing that indicates this will change anytime soon, since the percentage of Android users who own capable devices, and actually are willing to purchase apps is much, much smaller than the numbers suggest. Meanwhile, every single iPhone owner is a lucrative consumer. 

  • Reply 13 of 66
    apple ][apple ][ Posts: 8,360member

    Even though Apple ships millions of phones, quality takes precedence over quantity. Apple makes a quality product, and that product just happens to ship in the tens of millions, because it's that damn good.

     

    It's the exact opposite with Android. Quantity takes precedence over quality. Most Android manufacturers make a shit product, and they just try to unload their junk to ignorant customers, very often in BOGOF deals. They're literally giving their crap away. Is it any wonder that so many of them are struggling? 

  • Reply 14 of 66
    I'm looking forward to when Samsung will sell 4X as many phones and earn 1/4 the profit that Apple makes.
  • Reply 15 of 66
    sflocalsflocal Posts: 4,382member
    Quote:

    Originally Posted by wigby View Post

     

    This headline sums up the Samsung - Apple relationship completely. Of course pure profits are more important than pure marketshare but there is a tipping point. At some point (under 5% for PCs) developers and industry allegiance begin to pull away completely from your ecosystem as Apple found in the mid-nineties. I never want to be an iOS user looking over the fence and seeing so many more apps and accessories available for Android just as they looked at iOS a few years ago.

     

    iOS has a long way to go before developers begin to look elsewhere but there are some very early signs of developers now embracing Android and iOS together.




    Obviously, if Apple stopped innovating and raising the bar, your statement could be accurate.  Apple doesn't stop at all.  What they will be in a year may very well be in a much better position than they are in now.  Sure, Android is getting better, but the majority of Android devices are still running an old OS on junk hardware.  Over time, they will be replaced with newer hardware, but I still think Android's achilles heel will be the fragmentation and big gaps in OS releases.



    And then of course, for now (and in foreseeable future) the money for developers is still in iOS devices.  

  • Reply 16 of 66
    A couple years ago Samsung pulled a Google - change their accounting method. In one quarter their feature phone sales dropped while their smartphone sales climbed. They didn't suddenly sell half as many feature phones while doubling smartphone sakes in one quarter - they just changed the definition of a "smartphone".
  • Reply 17 of 66
    dcj001dcj001 Posts: 301member
    Quote:
    Samsung shipped 2x more phones than Apple

    Samsung shipped 1x more, or 2x as many, phones as Apple, not 2x more, as he said. He should fix this.

    Quote:


     

    Samsung shipped 2x as many phones as Apple




    Thank you for fixing your mistake, Daniel.

  • Reply 18 of 66
    chandra69chandra69 Posts: 638member
    Quote:

    Originally Posted by DCJ001 View Post

     

    The author of this article is illiterate. Samsung shipped 1x more, or 2x as many, phones as Apple, not 2x more, as he said. He should fix this.

     


    Well said!   If it really had sold out 2x more... then Sammy is more shit.

    If it had really sold out only 1x MORE as you pointed out... still Sammy is shit.

  • Reply 19 of 66
    bradipaobradipao Posts: 145member
    They didn't suddenly sell half as many feature phones while doubling smartphone sakes in one quarter - they just changed the definition of a "smartphone".

    ...or today's feature phones are actually as powerful as (for example) iPhone 3G, so it is correct to call them "smartphone".

    In a year or two all cell phones will be smartphones... we definetely need more categories. 8-)
  • Reply 20 of 66
    Well you gotta spend money to make money, and in samsungs case you gotta spend a lot of money to make money. It's what happens when your devices aren't compelling on their own without a media blitz.
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