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One in every four phones (of any kind) sold is now a Samsung; company earns $4.45B USD

When it comes to smartphones it's a tale of haves and have-nots.  Last year Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KS:005930) (the top Android phonemaker) accounted for 90 percent of the sales of high-end handsets.  The rest of the pack was left behind, trying to peddle lower-end hardware (often lower margin), or compete for the remaining 10 percent in the high-end, high-margin market.

I. Samsung Outsells Apple in Smartphones

For companies like HTC Corp. (TPE:2498) who have watched in dismay as Apple and Samsung gobbled up their market share, Q1 2012 sadly brought little relief.  Just a week after Apple posted a record profit of $11.6B USD on a $39.2B USD revenue, Samsung responded [PDF], posting a record $4.45B USD (5.05T Won) in profit on a $39.88B USD (45.27T Won) revenue.

In Q1 Samsung was on top of the smartphone industry, beating out Apple in unit sales.

Samsung girls
Samsung's attractive models beat out Apple in unit sales. [Image Source: Shootspeak]

Of its operating profit ($5.15B USD; 5.85T Won), $3.76B USD (4.27T Won) -- roughly three quarters -- came from the company's mobile (phones, tablets) unit.  Reuters is citing experts as stating that Samsung sold 44m smartphones for the quarter.  That would put it ahead of its more-profitable rival Apple on a sales basis.  Apple sold 35.1m iPhones for the quarter, placing it roughly 25 percent behind Samsung in sales.

The numbers are particularly impressive, given that a year ago Apple was estimated to outsell Samsung nearly 2-to-1 [source].  The Samsung triumph came to incredible growth.  While Apple managed to double its smartphone sales on a year-to-year basis, Samsung more than quadrupled its sales -- a superhuman feat.

Samsung building
Samsung more than quadrupled its phone sales on a yearly basis. [Image Source: Flickr]

The strong performance by Samsung's rival wasn't altogether bad for the electronics company either.  It raked in a profit of $669.6M USD (0.76T) Won -- or half of the remaining non-smartphone profit -- from its semiconductor division.  With DRAM prices plunging to new lows, much of that profit likely comes from Samsung's lucrative contract to produce Apple's CPUs.  Nearly every iPhone and iPad sold today carries a CPU produced at Samsung's Texas plant, which is just miles away from one of Apple's largest U.S. call centers.

Despite a legal war and an ocean between them, the pair remains closely tied even as they compete fiercely on the smartphone market.

II. Samsung Takes the Crown of the World's Top Phonemaker

Samsung reached an important milestone in the first quarter, with total phone sales (including feature phones) of over 90 million units (93.5 million by Strategy Analytics’ accounting).  With Nokia Oyj.'s (HEX:NOK1V) sales plunging to 82.7m units (11.9m smartphones; including feature phones).  Samsung is outselling Nokia's smartphones nearly 4-to-1, but it's also punishing the Finnish phonemaker in the budget market.

Nokia has tried to revitalize its budget phone lineup adding smartphone-like features, as seen in its new Asha models.  But the carrier features a big problem in that feature phones -- a market it long dominated -- are a dying market.

In Q1 2011 Nokia sold an estimated 84.3m feature phones.  In Q1 2012 it sold approximately 70.8m feature phones, a drop of over 16 percent.  By contrast Samsung sold an estimated 58.1m features phones in Q1 2011, and only 49.5m in Q1 2012 -- a drop of roughly 15 percent.

Aragorn king
It's official: Samsung is king of the phone market. [Image: Peter Jackson/Newline Cinema]

In other words, Nokia and Samsung's feature phone sales are vanishing at almost the same rate, but the key difference is that Samsung more than quadrupled its smartphone sales, while Nokia saw its smartphone sales actually fall to half their Q1 2011 values.

In other words, smartphones are what won Samsung the lead, or on the flip side of the coin, what lost Nokia the lead.  

The key factor that's dragged Nokia down is the fact that it's allowed Symbian to linger around far too long.  The majority of Nokia's top 20 smartphones still run Symbian.  And yet the company has announced that the platform will be dead soon.  Consumers don't want to buy a product that's on death row, so many are opting simply to abandon Nokia.  By contrast, Samsung offers consumers one consistent option -- Android -- with the promise of long-term support.

With Samsung's highly anticipated Galaxy S3 about to drop, Samsung looks unlikely to fade in smartphone sales.

Sources: Samsung [PDF], Supply Analytics



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RE: Hindsight will be 20/20
By matty123 on 4/29/2012 8:29:27 AM , Rating: 3
How about actually reading the article???

quote:
In Q1 Samsung was on top of the smartphone industry, beating out Apple in unit sales.


or

quote:
Last year Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KS:005930) (the top Android phonemaker) accounted for 90 percent of the sales of high-end handsets.


or

quote:
The Samsung triumph came to incredible growth. While Apple managed to double its smartphone sales on a year-to-year basis, Samsung more than quadrupled its sales -- a superhuman feat.


or

quote:
Samsung is outselling Nokia's smartphones nearly 4-to-1, but it's also punishing the Finnish phonemaker in the budget market.


RE: Hindsight will be 20/20
By messele on 4/29/2012 2:36:12 PM , Rating: 1
I read the article, I put it back to you, how about comprehending the article? Samsung's earnings report does not differentiate between handset types, indeed it lumps in all mobile products, including tablets. The article is ambiguous at best and easy to quote out of context as you have demonstrated.

My Turn...

quote:
One in every four phones (of any kind) sold is now a Samsung; company earns $4.45B USD


quote:
Of its operating profit ($5.15B USD; 5.85T Won), $3.76B USD (4.27T Won) -- roughly three quarters -- came from the company's mobile (phones, tablets) unit.


quote:
Samsung reached an important milestone in the first quarter, with total phone sales (including feature phones) of over 90 million units (93.5 million by Strategy Analytics’ accounting). With Nokia Oyj.'s (HEX:NOK1V) sales plunging to 82.7m units (11.9m smartphones; including feature phones).


Everything that mentions smartphone sales is an analyst estimate and these are not to be taken as gospel and in any case I would put it to you that well over half of all smartphones are also junk since they are not supported by their manufacturers beyond the first year.


RE: Hindsight will be 20/20
By matty123 on 4/29/2012 4:17:39 PM , Rating: 3
quote:
Everything that mentions smartphone sales is an analyst estimate and these are not to be taken as gospel and in any case I would put it to you that well over half of all smartphones are also junk since they are not supported by their manufacturers beyond the first year.


But that's because Samsung themselves don't release sales figures for their specific product lines only for their mobile division as a whole... Analysts have looked at the data and come to the conclusion that Samsung have sold 44 million smartphones, what do you suggest as an alternative? that we all listen to you? Instead of a firm of analysts who have probably poured over every scrap of available data and reached this conclusion... This is the best estimate of the amount of smartphones sold certainly better than a unsubstantiated blanket denial issued by one individual and I have yet too see any analyst firms disputing the numbers.

The second part of your post is pure drivel, it's absurd to say smartphones arn't smartphones purely because the manufacturer isn't offering support for them anymore, this in no way changes what they are or how many of them were sold.

Apple still includes the iphone 3gs in it's quarterly smartphone sales {I Believe} despite the fact that some of nokia's new feature phones have better specifications, it would be just as absurd to say apple shouldn't include those sales but the fact remains that the iphone 3gs is still a smartphone despite certain people's insistence otherwise in the same way you can't just say a smartphone isn't a smartphone anymore and make it so.


RE: Hindsight will be 20/20
By messele on 4/29/12, Rating: 0
RE: Hindsight will be 20/20
By matty123 on 4/29/2012 7:22:15 PM , Rating: 2
Fair enough seems I misunderstood what you meant about smartphones.

But considering that Samsung profits are up 82% from last quarter mainly on the sales of phones I will maintain that this article is correct.

Here are some quotes from Smasung's actual press release {In which I doubt they lied}.

quote:
Samsung’s strong performance in the quarter was driven mainly by the IT & Mobile Communications (IM) segment, which is comprised of four businesses, Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging. In particular, solid growth in the Mobile Communications business, with brisk sales of flagship GALAXY Note and GALAXY S II devices contributed to the company’s profitability.


quote:
Profits Propped Up by Strong Sales of Smart Devices

The IT & Mobile Communications division – including Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging – registered quarterly operating profits of 4.27 trillion won for the first period. Revenue reached 23.22 trillion won, and the mobile unit accounted for 18.90 trillion won, up 86 percent year-on-year. Growth in shipments of Samsung’s flagship GALAXY Note and GALAXY S II and other premium mobile devices yielded high returns, with significant growth in China, Central and South America, the Middle East and Africa.


Also Samsung have given us at least some info on their premium smartphones...

quote:
The Samsung Galaxy S II is one of the most successful high-end Android handsets out there and now it’s got the numbers to prove it. Samsung says the Galaxy S II has sold 20 million units in the 10 months since its release in April 2011.


Link: http://www.phonearena.com/news/Samsung-Galaxy-S-II...

quote:
Samsung announced on Wednesday that it has shipped more than 5 million units of its part-phone, part-tablet device, the Galaxy Note.


Link: http://mashable.com/2012/03/28/samsung-5-million-g...

At any rate I only replied because you said...

quote:
...because Samsung's model of selling 95% crap phones and 5% excellent phones is the way to go and Apple got it horribly wrong?


Looking at the data I would say that is clearly not the case {or at least in my opinion and seemingly the majority of tech sites reporting on samsung's success} through I will grant you that without exact sales on individual models it is impossible to confirm.


"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)














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