Samsung comes clean, Galaxy Tab numbers not consumer sales

The two million Galaxy Tabs previously reported by Samsung as sales, and reported on this blog, is really the number of units "sold" into the partner distribution system, and not consumer sales.

Companies need to realize that eventually the truth comes out, no matter what. This is especially true when it comes to product sales numbers, the true indicator of how well a product is received by consumers. Companies have a tendency to mix distributor sales numbers with consumer sales, and those can be two very different things. The company most recently outed is Samsung according to the WSJ. The two million Galaxy Tabs previously reported by Samsung as sales, and reported on this blog, is really the number of units "sold" into the partner distribution system, and not consumer sales.

This is a significant difference, as there are no sales numbers shared by Samsung's partners for the Galaxy Tab. The partners, retailers and telcos primarily, may be selling these units like crazy but the fact is we just don't know. Samsung may be happy to ship 2 million Tabs to partners, but if they are sitting on store shelves somewhere that is not the same thing as selling like hotcakes.

To be fair, most retail partners that companies like Samsung deal with do not report actual sales numbers. It's never clear if a given product is selling well to consumers or not. The distributor sales numbers, or shipping numbers, are often the only statistics we have to go by. Most likely Samsung's partners are selling a fair number of Galaxy Tabs, as the numbers reported by Samsung rose from 1 million after a month to 2 million in 3 months. That would imply some partners were increasing orders, something normally not done unless units were being sold.

The problem is we now have a big question mark concerning the Galaxy Tab, and how well it is selling to customers. This affects all analyst numbers about Android tablets in general, as the Galaxy Tab is viewed to be the one product actually shipping in significant numbers. Shipping, but perhaps not selling.

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