In the December quarter, Apple became the largest seller of smart phones in the world for the first time. Here is my tweet from September 4th.
So I can’t say I’m shocked. Yet, with a number of analyst firms reporting or about to report we are getting confirmation Apple did indeed pass Samsung in sales last quarter.
You can expect some mild disagreement with this claim. Counterpoint has come in and given the lead spot to Apple. While Strategy Analytics has called it a “shipment” tie. Granted, the Strategy Analytics headline acknowledges Apple as the top vendor, since Apple sold through their number and Samsung did not. I also expect Gartner and IDC to come in around this range for Samsung shipments. The takeaway is it was close. However, one thing no one at any of the firms will deny is Apple did, in fact, sell more smart phones than Samsung.
I prefer to base my models attempting to track sell through. I have access to live device data which helps me put parts of this puzzle together. From all the sources I have, and trying to get closer to sell through by the vendors, this is where I landed.
For Tech.pinions subscribers next week, I’ll do a deep dive on the December quarter smart phone data and detail the implications pointed out in my global model as well as look at some updated installed base estimates.
While an impressive feat, last quarter’s iPhone numbers are further evidence Apple defies conventional wisdom. Certainly, Samsung will be number one again next quarter. There are also certain questions circulating around Apple sustaining this growth as Bob O’Donnell goes into here for our subscribers. What we have to recognize is the trend lines. Trend lines, followed by sound study of global markets, is what gives us insight into not just current trajectories but future ones as well. Ultimately, that is what matters in this analysis. A good analysis is not just a snapshot in time but sheds insight into where things may go. This is where the focus will lie as we analyze the key story lines for 2015. Luckily, using sound data models, we can develop more educated insights about what lies ahead.
Apple’s success may be good for the company but not for its customers. For quite awhile now, when you call their Support line you’re always told “There’s currently an extended wait time to speak to an Advisor.” They used to say “15 minutes” but now they don’t even give a number, which means it could be more than 15 minutes! Their formerly wonderful customer service has deteriorated and that’s not a good trend.
This is a very good point. Had to have an issue fixed with my wife’s iPhone. Clicked to make an appointment and it was two days away. Pretty crazy.
Of course. You get much better results calling your android manufacturer with a problem.
This is as much, if not more so, a Samsung story. Their sales began declining well before the launch of the iPhone 6 which suggests they are losing a lot of ground in the lower end of the market. Is there any data to suggest Samsung’s sales will improve any time soon?
It really depends on the moves Samsung makes. However, one thing I am having to lean toward as a conclusion, is that Samsung essentially has no choice but to forfeit the premium sector. Which means they will start doing things to move volume, thus shipments could return but ASP will be way down. I don’t think the ASP or margins are maintainable at this point.
Samsung’s trajectory is steeper downward that Apple’s is upward. SO they will meet in the middle sometime this year. But it is an interesting question to tease out, but it is possible Apple could sell more smartphones than Samsung in 2015.
Fascinating story to watch.
If Samsung has no choice to forfeit the premium sector, what about HTC and LG? Will they forfeit that sector too?
Things are starting to look a bit crazy.
My thesis is modular companies can’t compete in premium. There may be some caveats I can develop, but I don’t feel it applies here.
I vote “Yes!”
They can all still go after it. And they can all still offer premium smartphones. But to “forfeit the sector” you have to “have” it first. So, some of the players already forfeit it major shares of it to Samsung. And, contrary to conventional “wisdom”, Samsung is showing that it isn’t able to hang onto it, either.
Why is it “that Samsung essentially has no choice but to forfeit the premium sector”? Is it largely because they have no ecosystem or control over/differentiation due to software?
Could be both.
If you recall this thing I wrote, it gives the basics. http://techpinions.com/samsungs-cautionary-tale/35415
My favorite line, is when you ship someone else’s software,(which your competitors use) you are only as good as your lowest priced competitor.
“..Samsung essentially has no choice but to forfeit the premium sector.”
And yet as you write this, Huawei has decided to focus on the premium sector in smartphones.
And Huawei will fail. Just like all the Windows PC manufacturers who tried to sell premium priced PCs failed. It’s the race to the bottom among manufacturers who offer the same OS –the other guy can always grab market share from you by pricing their widget just a little less than yours.
“Just like all the Windows PC manufacturers who tried to sell premium priced PCs failed.”
Can’t say if Huawei will fail or not, but Lenovo sells premium-priced PC’s and they’re growing at a healthy rate with decent profit.
Premium for Windows PCs but not really in the Mac’s neighborhood. I don’t think their margins come close at all to Apple’s Mac margins. Correct me if I’m wrong.
Agree that Lenovo sells very nice and well thought out Thinkpads. I’m not sure how well they’re selling, but I think that it’s doing ok.
As for Sony, they also used to do quite well with their Vaio line. Hence I don’t think it’s as simple as “If you don’t own the software, you’re always screwed”. It is much more nuanced.
What I think is different is that Windows was much more dominant and essentially unchallenged. Unlike Android, Windows was also strong with the most profitable customers. The Windows platform had customers who valued premium products. Therefore it was possible to sell premium product to them.
The problem in smartphones is that customers who value premium experiences do not seem to choose Android in the first place. That’s why Android OEMs can’t charge premium prices, whatever they try.
In other words, when Windows was dominant and thriving, Windows OEMs were differentiating among themselves. Companies that made premium hardware offerings could command premium prices (of course not as high as Apple’s margins, but substantial nonetheless).
In the Android world, to be a premium brand, it is no longer enough to offer the best Android hardware. You have to compete with Apple, and Google has not provided you with enough ammunition to do that. Competing with Apple is a battle that Android OEMs cannot win. The only thing left is to battle it out in the less profitable mid- to low-end tiers.
With PCs, OEMs competed among themselves. With smartphones, they have to compete with Apple for the premium segment.
What this perspective tells us is that if Android was better, dominant and was more popular in the premium segments, then there would be room for Android OEMs to differentiate and profit from these customers. Thus if Apple for some reason suddenly falls back to the Sculley/Gassee dark ages, then Android OEMs will regain profitability, despite using the same OS.
Yes my friend. You’re correct. Because the real, the substantial, value added of any tool…is the user and what THEY can do with it. THEIR creativity and resourcefulness.
The race to the bottom has put powerful computer’s everywhere, not just in the “best customers” hands.
Eh, I’m not going to be drawn into this
the-best-computer-is-the-one-you-can-meticulously-customize-to-fit-your-most-idiosyncratic-user-requirements
versus
the-best-computer-is-the-one-that-just-let’s-you-plunge-into-your-work-without-need-for-very-fine-tweaking-and-tinkering.
As did Sony. It doesn’t seem to have worked out for them. At least not yet.
I think it is important to underscore how Apple fired on at least two fronts–Innovation with #iPhone6 and 6 plus. More important is that they managed the supply chain brilliantly on a global basis and execute that Tim Cook is famous for. Many companies introduce products but the real question is becomes if they can execute at scale. Clearly Samsung could manage it volume (but not so much profits). Can Microsoft execute its Surface Pro at scale? The unsung part of Apple is its flawless execution that it has clearly improved from iPhone 4 to 5 and now 6 and 6 Plus. @NVenkatraman