Remember when Apple surpassed Nokia to become the world’s best-selling smartphone manufacturer? Well, Apple only had one quarter to enjoy this title, since Samsung just soared past them by quadrupling its smartphone shipments, making Samsung the largest smartphone manufacturer in the world. Update: As was noted in the comments, Apple also uses shipments – they just call them sales. Straight from their SEC filing.
Samsung shipped 27.8 million smartphones this past quarter, grabbing a total of 23.8% of the market; the company quadrupled its smartphone shipments compared to the same quarter one year ago. Apple sold 17.1 smartpones, capturing 14.6% of the market. There is generally some confusion about sold vs. shipped, but considering the shipping times for the Samsung Galaxy SII were rated as “unknown” and “4-6 weeks” until early October, I don’t think there’s a lot of channel stuffing going on here – you don’t quadruple shipments if resellers can’t get rid of these things.
I have also been interested in how, exactly, Apple keeps track of units sold, since I’d hazard a guess most iPhones in at least Europe are sold by resellers, and not by Apple itself. Perhaps they use activation data? That’s something other manufacturers can’t do, obviously. Still, the shipped vs. sold is something to take into account here. Update: As was noted in the comments, Apple also uses shipments – they just call them sales. Straight from their SEC filing.
As a sidenote, this reminded me of May last year, when I predicted the iPhone would be relegated to a market share of about 10% within a few quarters. This prediction was cast aside by some as unlikely or as me just being anti-Apple, but even though it doesn’t matter in the grand scheme of things, it’s always nice to be vindicated (well, almost). I never claimed I’m never incredibly petty.
As far as profit margins go, Samsung’s are the second best of the market at 16.9% (and they’re rising). Apple is still by far the undisputed king here with profit margins of 30.8%, meaning Apple is still raking in a fat profit margin – but Samsung is gunning for them. Samsung truly controls the entire stack, while Apple only designs their phones, and then buys every component from somewhere else, only to then have them assembled somewhere else. In theory, Samsung should be able to have profit margins better than Apple’s.
The strong results in Samsung’s telecommunications divisions also means this division now accounts for 60% of Samsung Electronics’ operating profit, surpassing the chip division for the first time. However, since 26% of the iPhone’s component costs (iPhone 4 in this case) goes to Samsung, the chip division may see an uptick next quarter due to the launch of the iPhone 4S. Of course, the 4S will undoubtedly affect Apple’s numbers as well, but it’s unlikely to close the gap with Samsung.
As a final note, it’s of course crucial to mention that as far as tablets go, Samsung still has a very long way to go – the iPad rules supreme in this space. Add to that the iPod Touch, and iOS surely isn’t going anywhere any time soon. Android is, for all intents and purposes, a one trick pony (smartphones), while iOS is also very successful on music players and tablets. This matters for developers.
What all this ascending and abdicating of thrones means is that competition is very, very healthy in the smartphone space (making the patent lawsuits all the more sad). Companies continuously push each other to create better products, and there’s no way in hell that either iOS or Android would be where they are today without breathing down each other’s necks. On top of that, Windows Phone 7 would never have existed – and that would be a loss, since it’s by far the most unique and original of the bunch.
It’s sad we had to say goodbye to webOS and MeeGo – then again, in such a volatile market, who knows where we’ll be 12 months from now?
While the article title is clearly click bait, I like the article as it is well written
Also sad to see the loss of WebOS, IMHO the only real changer to iOS.
-edit- also while I’m on the subject of great mobile operating system I honestly can see what Thom likes about Win7 phone… I was at the HTC Radar/Titan launch event last month (where I loved the free alcohol and sushi), and I had a chance to really play with a Win7 phone and I have to say it is a total interface mess, it makes little real world useage sense… I was amused to watch other people fumbling around with it too, not quite sure what to do or where anything was… Original maybe, but useful or even effective it is not…
Edited 2011-10-28 15:28 UTC
Uh, how is it clickbait when it’s a 100% reflection of the truth?
I confus
.
The article makes it clear that while Samsung shipped the most, we have no reall idea how many were actually sold, I also note that the shipping figures haven’t home from Samsung but actually have been extrapolated… I will have to dig around to find out where I read that, appologies (for not listing my source here).
But, in seriousness, good article!
Also a lot of people were waiting for the iPhone 4S, which seems to be selling well.
Do you know how accounting works?
A sale for Samsung is when they fulfil an order and a payment is due(a.k.a shipped)*. Same goes for all other companies, including Apple. Who actually buys the device has no effect on counting the revenue.
* – With the exception of intra-company shipments.
it is clickbait all over the internet.
samsung sold more during the 3 months everyone was waiting for the yearly iphone announcement. uhhhh not so useful information about the big picture.
So, you’re saying Samsung quadrupled its shipments because the whole wide world was waiting for the 4S? That doesn’t make sense. All those people who bought a Samsung smartphone the past quarter aren’t going to buy a 4S.
I’m saying 3 months of one year during unusual circumstances is not very useful or important information.
I do think people were waiting to see what the new iphone would be. that is obvious if you have a long memory.
Edited 2011-10-30 16:37 UTC
But then, you possibly – and many people certainly – will be flaunting the stats after the “avalanche” period from people wound up by waiting (heck, we know Apple essentially does it, by the way they open and present pre-orders); offering an alternative of… much more* distorted period, just on the side you like.
Since the side of Android doesn’t really have such “droughts” – their advance is more balanced.
Shipments != Sales
unless every phone you ships has sold, and there are lines outside the stores each morning. Every phone Apple can make sells in hours. Stuffing a channel with inventory that won’t sell for weeks is another thing.
Argument is fine. Disagreement is OK. Calling one thing the same as another when it isn’t is just click bait.
I have used iOS and Android before jumping to Windows Phone 7 about two months ago. And let me tell you this: the OS totally rocks. Not only does the interface stay out of my way (hello Android!), it’s also good looking and has tons of nice little touches that you rarely find in software nowadays.
Would you mind sharing what looked like a mess and made little sense for real world usage? I find the “jump in and jump out” (or whatever slogan MS used in their ads) is actually true. I’ve pinned my most important items at the top of my screen, and with just a swipe I have access to: how many calls and messages I had, what’s new on FB, how many unread emails I have, what’s coming up next (Google Calendar, Facebook, Windows Live), and my todo list. Then if I swipe down I have weather and a few other shortcuts to apps I frequently use. I find this way better than having 10 widgets on 5 home screens along with 15 notifications in the notification bar.
I also didn’t notice the lack of any major apps I need. Most of what I want — media player, RSS reader, chat, Office, email, web browser — is already there or is available in the Marketplace.
But maybe I’m just odd and I’m one of the 3 people liking Metro. It certainly doesn’t seem to click that well with the majority of people.
If it works for you then that’s the most important thing! I just couldn’t get into it after half an hour of playing… And I wasn’t alone… HTC let us play with the phones and we were all struggling to make sense of it, my friend who was with me already had a win7 phone so he was able to guide me for the first 10min… But other people weren’t so lucky, one guy just gave up… It was stark contrast to watching my grandmother pick up my iPhone and use it with only minimal prompting.
I will agree the interface is original and unusual, if that’s what you want then it’s perfect… But I just need stuff to work now, I’m not 21 anymore
Yep, if it doesn’t work for you that’s fine. But when people ask about WP7, tell them to try it for themselves. The people who do get Metro seem to be very happy with the OS.
How is the Google Voice integration in WP7… you ever tried it? Not having that baked in would be a deal breaker for me
That’s not one of the things I need since Google Voice doesn’t yet exist in Europe. Still, I believe there is an app for it in the market.
Im on Gingerbread… since when is it backed in?
I would have gotten an WP7 phone in September but my carrier only had one phone and it had an LCD screen rather than an AMOLED… I could have dealt with the hardware being over a year old since that is how Apple roles as well, but please… who the F makes a high end phone with out an AMOLED screen these days?
I find it funny that “Apple sold 17.1 smartpones”. Makes me wonder who got that 10% of a smartphone and what he should do with it…
Didn’t Samsung join the Tizen project? Hopefully they’ll produce nice high end Linux compatible devices soon enough, where evolved Meego systems (such as Tizen and Nemo) will be able to run.
Edited 2011-10-28 16:49 UTC
And in this time Dell goes big with Linux in China
HP decide to keep its pc business and decides to build ARM servers.
ARM in itself released it’s new 64bit platform.
This though will probably not make it to OSAlert. Sigh
Edited 2011-10-28 18:11 UTC
You do realise I’m not a machine, right? When you send us a link, a story does not magically roll out of me. Takes time, effort and work.
The ARM stuff is in the works.
I can pretty much guarantee that we would publish all of those stories if they were submitted.
:http://www.osnews.com/submit
“Android is, for all intents and purposes, a one trick pony (smartphones”
I don’t see how that’s accurate when Android is #2 by a wide margin in tablets (~27%), and Apple has little more than twice as much. Android is also rapidly gaining ground. I expect signifigant holiday sales of Android tablets.
If you statement was true, I could make the same statement about Apple in the mobile phone market, with only 14.6% of the market share compared to Android’s ~50%. Also, Android will continue to eat RIM and Symbian’s lunch.
And that’s also really a smartphone market – relatively small portion of mobile phone market, still…
http://www.loopinsight.com/2011/10/28/the-bullshit-samsung-smartpho…
@MOS6510 – The numbers are stated very clearly:
Samsung shipped 27.8 million smartphones in the past quarter. Apple shipped 17.1 million smartphones in the past quarter.
Reading over that link you posted, I find it very sad to see how blind some people are when it comes to their worship (and let’s not split hairs here – it is worship) of a company.
Apple sold 17 M.
As reported by whom?
Apple’s own quarterly financial result report, which better be right or they are breaking the law.
Other companies tend to report “shipped” units to make the numbers look bigger. Shipped doesn’t mean sold (unless it’s an iPad).
How does Apple track the differences in their “sold” vs “shipped”?
I have no idea. I guess non-Apple shops report, just like Apple stores, what they have sold.
The numbers Apple report are very likely correct, Apple would be in violation of US law if they weren’t.
They do count shipments to carriers/operators/resellers as a sale(aka revenue)
To quote the SEC 10K filing from Apple:
Part II. Item 7. Page 26
Critical Accounting Policies and Estimates > Revenue recognition
Then I wonder why Apple says “sold” and most companies say “shipped” and people point at the difference between those terms. Of course the difference reflects on the question of changing marketshare, but not on money collected.
Demand for Apple stuff is sow high that there is little difference between shipped and sold for them anyway.
Does Apple sell their iPhones to stores and does Samsung let stores sell their devices in commission, taking back unsold devices?
Because Apple and its fanboys think Apple is “different” and all their successes/failures/politics/whatever should be measured by a different standard than anyone else?
Edit: I misread something.
Edited 2011-10-29 20:38 UTC
Apple never stuffs the channel. The main reason why Tim Cook is the CEO today is because he streamlined Apple’s entire manufacturing process so that there was no inventory sitting on shelves.
If you buy a Mac Book pro with a matte screen, for example, the manufacturing of that laptop is completed in China the day after you order and a day or two later it’s shipped by UPS from Shanghai.
Obviously, that’s not always an advantage. Just now your looking at 2-4 weeks to get an iPhone 4S in the US and I’d wager that it would be like that for several months. That’s bound to cost Apple some sales.
Nonsense. Go to any computer retail store in The Netherlands, and the walls are lined with boxes full of MacBooks, iMacs, iPods, and often, even iPhones and iPads. Go to an Apple Retailer (not an Apple Store, we don’t have those) and there’s never any waiting time.
I can know. I’ve purchased loads of Macs, iPhones, and iPads. Never had to wait (except right after the iPad 2 came out).
Edited 2011-10-30 00:08 UTC
FYI, stores having inventory is not the same thing as, nor proof of, channel stuffing.
Being a former procurement professional myself, Tim Cook is basically my hero. But his genius is not in “not stuffing the channel”, because they do stuff the channel.
His brutal negotiation and his work with suppliers to reduce the waste on route to the shelves is why he’s my hero. Also he adapted Apple’s supply chain to be very flexible at scaling in both ways.
as if apple would give a damn about that
Do you happen to have a link where Samsung has specified how many units it shipped? Cause all I’ve seen is some analysts estimate. Otherwise I’m not sure how much the “very clear” numbers mean.
@rhavyn – just the numbers reported by Strategy Analytics which has no “dog in this fight”. They are an extremely reputable company, so I have no problem in thinking their numbers are accurate.
Edited 2011-10-28 20:06 UTC
So you’re making an assumption based on an estimate.
I totally believe that their numbers are honest, ie they aren’t purposefully skewing them. However, my understanding is that they took some vague “shipment” numbers Samsung reported some time n the past and then mixed in a vague “percentage increase” Samsung reported. So you mix these two values together and I’m not sure how much meaning they have. I’m not saying they are dishonest, just what is the margin of error etc.
And just so it’s clear I do believe Samsung is currently the market share winner in the cell phone industry I just don’t find the fact that they don’t report numbers themselves to be very palatable.
what you believe is that they are begin honest in their estimation….great… so you know they tried really hard to come to an accurate estimate…. that still makes it an estimate and is only as accurate as their methodology allows.
You predicted that iOS would be relegated to 10% of the market in total, not in shipments per quarter. In that your prediction is wildly off as Apple commands 25-30% of the market (and if you include the iPod Touch and iPad iOS is actually probably the most popular ‘mobile os’).
The 15% figure is the last quarters sales while Apple’s latest device was 12-15 months old. During this period Samsung released a bunch of devices (I wanted to count them but I found 10 and then I stopped.)
So, in this case, a mea culpa rather then ‘I was right’ is more appropriate. That’s not say you prediction won’t come true ultimately. I actually think that Apple’s market position will weaken over time simply because they won’t ever make super competitive low cost products and won’t do well in emerging markets.
There is, however, no danger to Apple’s in the short term with Apple no doubt growing share over Q4.
Finally a note about Samsung. Their a conglomerate so the profit on the devices at the top of the food chain needs to be taken with a grain of salt. You’ll note that although the profit on devices has increased their profit overall has declined. In other words, their stronger profit on devices is likely because their ‘selling’ the components to their devices division at a lower cost rather than because their selling the devices at a higher cost.
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Wrong. This is what I wrote:
“as much as I love my iPhone, it will be relegated to a ~10% market share figure within a few quarters”
This is exactly what has happened. The iPhone 4S will give this figure a bump, but not by THAT much – especially since the Galaxy SII launch in the US will factor in Samsung’s next quarter.
Please, don’t resort to lying and twisting.
Edited 2011-10-28 22:04 UTC
Ok, well, let’s baseline this with some real number so that fuzziness like what happens in Q2 vs Q3 and what’s shipped versus what’s in customers hands is somewhat eliminated ….
http://en.wikipedia.org/wiki/Usage_share_of_operating_systems
If you look at mobile operating systems, as of LAST MONTH, these makeup about 5.57% of the market as a whole and of these iOS makes up 3.67%.
So, as of TODAY, iOS has 66% of the mobile operating system market as defined by devices connecting to the web.
I am not lying or twisting here, right? My numbers are purely based on median metrics derived from numerous sources of these metrics.
Now I appreciate this is mobile operating system in total and your talking about smart phones but I bet even without iPod Touch and iPad Apple would still have in excess of 50% of that market TODAY.
(I do understand that Apple has only 14.5% of smartphone shipments last quarter. You never suggested in your original article that your prediction was based on ‘shipments per quarter’ to define market share. If it helps you sleep night to redefine the ‘market’ in retrospect then power to you.)
That entire previous article was about shipments per quarter. So, uhm, that was what it was about. On top of that, market share is generally looked at per quarter due to our quarterly results system. That was pretty obvious. You’re really grasping at straws here.
I think I see what went wrong here, you meant to put a question mark at the end of the title!? Then the article’s title makes sense, because the article is about the fact that we have no idea how many phones Samsung actually sold… And we are on shakey ground estimating how many they actually shipped (to resellers).
It is possible that Samsung have sold more smartphones than Apple in the last quarter… But we just don’t know.
I have had to wait 15 days to get an iPhone 4S… But my phone carrier had plenty of Samsung smartphones in stock. iPhones (all models) have been selling as soon as they reach the stores (here in London) you’ve can check the O2 stock checker for yourself. It’s going to be an interesting* Qurter 3
*by interesting I mean boring
If you would just make a small effort you would find that, over the last 3 months, iOS actually grew it’s share of the install base.
Now how do you suppose that’s possible if Apple had only 14% share of sales in that same period (or for that matter how it managed to capture 60+% of the market having never held more that 30% of sales)?
Could it be that (a) the numbers you are quoting – which came from some random UK analysis firm – are not in any way factual (since, you know, Samsung does not break out their smartphone unit volumes) or (b) that most of those devices are not actually smart phones or (c) that many of the units shipped are not sold or (d) that many units are returned.
I actually have no idea but it’s clear that someone is using fuzzy math to identify market trends because it’s not possible for Apple to grow it’s iOS install base – to 60+% PERCENT – while it’s share os sales is down to 15%.
Just as an added data point, Samsung said it took them 85 days to ‘sell’ 5 million units of the Galaxy II S. Apple sold 4 million iPhone 4S units in 4 days! Tell me again how the iPhone 4S won’t impact sales share?
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I hate to like reply to myself but while we’re into stupid analyst numbers …
http://blogs.barrons.com/techtraderdaily/2011/10/21/aapl-42-5m-ipho…
According to this Apple will triple it’s iPhone sales volume in Q4 to almost 45 million.
Personally I can’t imagine Apple can make this many devices so I think this ‘analysis’ is wacky but there you go.
Edited 2011-10-29 21:21 UTC
45mil is a bit optimistic. 20-30 range is possible. They will definitely break the 20mil barrier, but I really doubt that they will go any higher than 30.
In other words… 0.6%?
Hm, yes, that’s actually sort of more accurate than most metrics you throw around – Apple said they sold ~150 million iPhones total, let’s assume ~100 million are in use …that makes ~2% out of 5+ billion mobile subscribers (just so you can have some perspective, about the growth potential of mostly Android)
Cute, so you base you views on practices (people wound up by waiting on “the one”, the time vs. PR spectacles and coordinated way of opening pre-orders) which are meant to produce mostly those impressive, distorted numbers (vs. the side which doesn’t have “droughts” of models, one with balanced advance – and this is somehow a weakness in your eyes)
Considering that Apple have admitted that they’ve sold 160mil of iPhones, they do not have 50% of smartphone market.
Android has had 190mil devices activated against Google services. And if you factor in that RIM and other smartphone OS’es how much is that?
There is another thing, though. Apple has sold over 260mil of iOS devices overall. So that 66% just might be in line with their portable devices unit* share.
PS: As we speak, Android users consume much more mobile data traffic than iOS.
* – I’m not using market, because market share usually means the number of sales captured out of the whole sales pie.
Well, yes you are. While, hilariously, in a post just below ( http://www.osnews.com/permalink?494797 ) you write “I actually think that Apple’s market position will weaken over time simply because they won’t ever make super competitive low cost products and won’t do well in emerging markets” – THIS IS ALREADY RAPIDLY HAPPENING, it’s well under way, and those “lesser” people are under-represented in web stats (like with desktop OS stats http://www.osnews.com/thread?493282 but probably much stronger, with costs of mobile data connections & how it pushes them into frugal or “it can wait” usage)
Presenting “as defined by devices connecting to the web” (which is also really mostly “big western sites”) as if it brought more clarity is a massive distortion. There’s not much “real”/”non-fuzzy” about this number, sources of those metrics.
And then, you might reconsider taking on the face value the “definition” of smartphones promoted by loud pundits in atypical places, the likes of yours (why SE A200 isn’t a smartphone? S40? It does more than iPhone for its first year or two, and it has more share than anything).
You redefine (well, accept the definitions of your liking) the market as a matter of principle, it seems.
Edited 2011-11-04 21:47 UTC
You forget to mention that this number is something that some analyst came up with.
The only thing that Samsung revealed was that revenue for the Telecomm business grew by 37%. That’s all.
Would be interesting to see how it breaks down per phone model. Apple’s number include 3 phones (3Gs, 4, 4s), while Samsung’s number includes how many different models?
While it’s easy to say ‘Samsung sells/ships more phones in total than Apple (nothing wrong with that), it would still be interesting to see numbers for each phone model.
Looks like they classified by price range.
Burp!
Edited 2011-10-29 04:15 UTC
Lol, I’m actually and Analyst… I love having Anal in my job title, makes me laugh… Yes I need to grow up!
You still lose* to security penetration testers ;p (though sometimes I worry they are mostly just anecdotal ;/ )
*there’s a scary opportunity for an “oo” mistake…
A relatively open software platform with a vast array of models beats a closed proprietary platform with a tiny model range. Anyone with half a brain could have predicted that this would happen.
Obviously Steve Jobs didn’t learn any lessons from his previous two fsckups – the original Mac and NeXT.
Seems like you’ve misinterpreted the definition of deja vu.
Increased sales year over year and more than 50% profits of the entire phone market (yes not just smartphones).
http://www.asymco.com/2011/07/29/apple-captured-two-thirds-of-avail…
Oh and this “open” platform is so great for the users, oh wait….
http://theunderstatement.com/post/11982112928/android-orphans-visua…
Edited 2011-10-29 14:21 UTC
There is a saying in investment circles.
Past performance is no guarantee of future earnings.
Within five years time.
a) all phones will be smartphones (unlocked smartphones currently cost as little as $50 in China)
b) quality tablets will be incredibly cheap (less than $100). The Chinese are already selling unlocked 10″ tablets with capacitative touchscreens for $200. That price will drop to $150 within a matter of months,
C) per unit profit margins will be tiny ($5-10).
So how is Apple going to mega profitable when they are hundreds of much cheaper products competing covering every single market segment?
This is how the PC almost killed Apple back in the mid 1990s.
Yep, and look how that turned out. (Hint: Apple is worth more then Microsoft, Dell, HP, etc.)
There will always be a market for premium products. I could drive a very nice USD 20k car but I choose to drive a USD 80k car as do millions of consumers throughout the world.
You have absolutely no idea how businesses are valued. They are only worth a multiple of their latest earnings. A couple of bad quarters and the value of Apple will plummet.
Don’t believe the marketing hype. There is absolutely nothing “premium” about Apple products. They are all mass produced commodity products assembled in Chinese factories.
Car analogies are totally absurd:
– luxury cars are exclusive and expensive. iPhones, iPads and iPads are are relatively cheap mass produced electronics.
– car technology improves at a glacial rate compared with electronics. A 20 year old Mercedes has most of the features of a new Mercedes. A 20 year old mobile phone or computer is a doorstop.
– No luxury car maker builds millions of identical cars each year in a Chinese factory.
– No luxury car engine dies after two years. No luxury car is worthless after 3-4 years.
Valuations (such a fleeting thing) and car brands don’t work as you think…
…but OK, lets go with your car analogy!
Essentially, you inadvertently state, yourself, that Apple products are primarily… positional or even veblen goods! That’s what luxury car brands are! (luxury items, in general)
But it’s even more that that. Look around you – virtually all luxury car manufacturers are, nowadays, just brands of more versatile “volk” manufacturers; the resources of the latter push innovation and technology forward.
Luxury brands remaining on their own are typically just about niche, irrelevant, “nostalgia-based” offers.
So, I guess, you are arguing that, quite soon (considering this field is much more volatile, evolving much faster than automotive one – you can just look at Apple history, if you have any doubts about that), Apple will be up for grabs by the likes of Samsung…
There’s also how, IMHO a bit more than 10 years ago, cars became quite universally “good enough” / now it’s largely just about fillers (see at the irrational SUV craze if you any doubts about that).
Sure there’s lots of place for improvement in propulsion tech, but it will hardly impact the experience (autonomous cars might do that*); plus the innovation is largely being done and implemented by “volk” industrial powerhouses, anyway (*same; and also by some Apple competitors who are about cooperation with established car conglomerates).
Heck, a “hot” or even “warm hatch” of today is quite often a better race car than many sports cars of 3 decades ago (particularly when any turns are involved, when it comes to handling – people greatly under-appreciate how massively it improved over the last few decades)
BTW, I loved how Porsche almost-kinda-tried a takeover of Volkswagen – but then realized to their horror how their financial valuations and assets are worth much less than previously imagined; essentially, in practise (if not strictly on paper) led themselves to takeover by VW.
Edited 2011-11-04 20:11 UTC
Smartphones for $50 and tablets for ^a‘not200 ?
Don’t think so…
You do realise that the push is to make these devices as powerful as possible. Better screen, better cpu, more ram, better battery life, better camera. Add it up and that means that they’re not going to approach $200 anytime soon, not the ones that are selling’s in big numbers anyways.
Take a look at the music player market evolved these past 10 years and you’ll get the idea.
They are already available at these prices in China.
eg Zenithink ZT-280 C91 10.2″ Android 2.2 Tablet PC Capacitive Touch Screen CORTEX A9 1GHz 512MB DDR2 WIFI G-senor Camera (USD229 shipped).
The $50 tablet is totally plausible within five years.
The push for higher specs is coming from the phone marketing departments not the public. More specs equals bigger margins.
Current smartphones are already more than capable of performing the tasks required by 99% of buyers.
The reality:
higher resolution screens are pointless.
bigger screens are impractical.
you can’t take decent photos with a fixed (phone) lens.
battery aren’t improving.
phones can’t get much thinner.
My Ericsson T18s phone cost AUD1200 in 1999 (equivalent to around AUD2000 now). I can buy an unlocked Nokia for AUD29 that is vastly better. A better phone for 1/65th the price!
Ever heard of Motorola and RIM?
Ten years ago Motorola totally dominated the high end phone market. Five years ago it was RIM. Motorola has gone and RIM is in serious decline.
Apple has a tiny portfolio of rapidly aging hardware products that are vulnerable to competition.
Go Sammy!!
Edited 2011-10-29 10:40 UTC
Profit share of the smartphone market is the prime metric for me. Compare Apple and Samsung profitability if you want to really know who is “winning” the game. That said, choice is good, and anyone can apply a modicum of due diligence to figure out which device and ecosystem deserves their hard earned money. The polish of the iPhone 4s works best for me…..ymmv.
Samsung has a similar capitalisation to Apple. It has twice the revenue of Apple.
The huge difference between Samsung and Apple is:
– Apple has a ultra risky business strategy that derives ~65% of it’s revenue from phones and tablets.
– Samsung is a massively diversified global conglomerate (shipping , vehicles, insurance, banking, hotels, theme parks, engineering etc) that considers phones and tablets to be a minor part of their electronics business.
Samsung can’t lose because they manufacture most of the components which lowers their costs and they can afford to subsidise their phone business from other divisions.
If Apple makes one major business error they will probably be ancient history.
Edited 2011-10-30 07:50 UTC
Apple has supposedly been one business mis-step away from doom for the past 14 years. They are a very well managed enterprise that doesn’t rely on a third party to estimate their shipped/sold smartphones. What they have accomplished will become part of business school case study for decades to come.
Plenty of well managed enterprises have gone broke. See Pan American World Airways for an example.
It is far more likely that Apple will be a business school case study of how to burn $300 billion in record time.
Edited 2011-10-30 12:45 UTC
That reads more like wishful thinking on your part than anything beyond tribal wisdom.
It is nothing to do with wishful thinking.
All corporations are extremely vulnerable to “black swans” – unexpected events. The less diversified a business is the more vulnerable it is to a black swan. Pan Am’s black swan was the Lockerbie bombing.
Unfortunately businesses and analysts tend to massively underestimate the probability of a black swan (or multiple black swans) and the effects it will have on a business.
There are a huge variety of highly plausible events that could massively disrupt Apple’s business – disruptive technology such as ultra cheap touchscreens, a severe economic downturn, lawsuits, fraud by a senior executive, industrial espionage, the sudden death of critical executives, a major earthquake, a long running strike or a fire at a critical component supplier etc. There is no reason why multiple black swans cannot occur simultaneously.
My take is that Apple has been extraordinarily lucky in the past rather than extremely well managed.
Edited 2011-10-30 22:50 UTC
No company has that much success due to luck….that’s non-sense. Their ability to cut deals, control the supply chain and design and manage a unique ecosystem with the highest customer satisfaction in Tech is a more plausible explanation.
Apple failed ~14 years ago. They didn’t fold probably mostly due to the level of following they enjoyed (and maybe even also ’cause MS desired to be able to point fingers at some “competition”), a following completely unmerited at the time – Apple offered, for better part of a decade, worse and more expensive* products.
What happened afterwards seemed kinda like (mostly wilful, but still) corporate takeover, pretty much gutting most of Apple projects, betting on continuation of core “alien” ones, and starting big new ones some time later.
Most brands don’t have such 2nd chance.
*That in itself places them firmly outside of “rational” economic considerations and into, for example, positional or even veblen goods.
Come on, there was even a popular action of “buy OS8 to help Apple” – and pirate groups refusing to supply it – where the (poor) quality of the product didn’t even enter the equation, which was insane; it deserved to flop.
In your opening post, you cherish a company with already higher margins; one can, sort of, say – a company which already rips you off more.
Anyway, it won’t last (again), and they’re quickly on the path towards “worse and more expensive” (at the moment, already ~”comparable and more expensive”) with mobile phones. 3rd chance is less likely (unless the messiah returns after all…)
Nearby you also say:
See, that’s not anywhere so clear. For a start, check out this book http://en.wikipedia.org/wiki/Fooled_by_Randomness (and/or at least the “survivorship bias” Wiki article linked there)
Consider a hypothetical market, where overall yearly performances of ALL entities are no better than chance. Even after a dozen years, some sparse selection of them will have a string of successes year after year …WHEN, AGAIN, THEIR DECISIONS WERE NO BETTER THAN RANDOM.
And they will be looked upon by others, by public, as some kind of role models – worse, this will probably happen after just a few years, greatly helping their “luck” in later years.
Reality is somewhere between that hypothetical scenario and “rational” economic considerations.
Few random fortunate circumstances, and people (or companies) often ride their whole life on them (US seems particularly susceptible to it, it’s at the bottom of social mobility among developed countries – roughly: a metric telling how much of your personal outcomes depends on effort, hard work, etc. vs. how much on being born into the right amount of money and connections; so called “nanny states” are at the top worldwide, BTW), as long as they will simply avoid blunders – and unclefester outlined why that might not apply to Apple for very long.
People have bad memory about their darlings… http://www.osnews.com/permalink?495341 (NVM how easily manipulated our satisfaction is, it gets easily influenced by what we desire to enjoy at the time – our brains are very powerful like that, they are easily able to think different if they “know” they should, it’s an easy trick for them: http://news-service.stanford.edu/pr/2008/pr-wine-011608.html http://www.gsb.stanford.edu/news/research/mktg_shiv_pricing.shtml )
OS8 had high declared customer satisfaction for no good reason – in the 2nd half of the 90s, Apple offer was horrible. Most of development efforts – blank alleys. They deserved to fail completely.
That they didn’t, was largely luck; again, most companies don’t get such second chance.
As far as I can find information on the web Samsung officially only claimed, that they increased their sales by 40 % quarter to quarter. According to engadget, Samsung shipped 17 million smartphones in Q2 2011, i.e they shipped 17*1.4 = 23.8 million in Q3 2011, not 28 million.
But: who cares?
.. be interesting for somebody else that the fangirls?