Smartphone wars: Samsung top dog...for now

Smartphone wars: Samsung top dog...for now

Summary: Samsung should celebrate being the king of smartphones today, but the fourth quarter competition is going to be far more challenging.

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Credit: Strategy Analytics

Credit: Strategy Analytics

Samsung led the smartphone pack in the third quarter, but it's uncertain how long the Korean electronics giant can stay top dog.

According to Strategy Analytics, global smartphone shipments hit 117 million units in the third quarter, up 44 percent from a year ago. Samsung shipped 28 million smartphones and trumped Apple with 24 percent market share. The news has techies all abuzz.

On its earnings conference call, Samsung said its new Galaxy devices as well as Long-Term Evolution phones drove its results.

Morgan Stanley analyst Keon Hon noted that Samsung's phone performance was impressive. Hon said in a research note:

Handset volume was much stronger than anticipated at 91 million to 92 million vs. 88.5 million expected. We think about 29 million of that was smartphones (up nearly 45% quarter over quarter in terms of volume) which drove up the blended average selling prices and margins again on better mix. 4Q11 guidance was positive with expectations of further volume growth and mix improvement. More new products are being released both at high-end and mid-end.

All is well for Samsung right? Not so fast.

There are a few good reasons to take this Samsung rules smartphones line with a hefty grain of salt. For starters, Samsung benefited from Apple's iPhone 4S launch. As noted on Apple's latest earnings call, the company was looking to clear inventory ahead of the iPhone 4S. So far in the fourth quarter, iPhone 4S sales have been on a blistering pace. Some of those sales will come at the expense of Samsung devices.

In addition, Motorola and HTC have new Android devices hitting the market. In the U.S. Samsung won't have the LTE market to itself.

Meanwhile, it's also worth checking out IDC's latest data. IDC noted that smartphone growth in the third quarter slowed as many folks waited for new phones. The overall mobile phone market slowed.

IDC noted that Nokia's stemmed its market share slide due to a better feature phone lineup. Now Nokia is going to carpet bomb the globe with Windows Phone devices.

Add it up and Samsung should celebrate being the king of smartphones today, but the fourth quarter is going to be far more challenging.

Topics: Samsung, Hardware, Mobility, Smartphones

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45 comments
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  • Any indication of how many are Bada?

    Last quater, it was about 5,000,000 of the smartphones Samsung shipped were Bada with an estimated 12,000,000 slated for this quarter.
    Bruizer
    • Any indication of profits?

      @Bruizer
      Sales don't count if they don't bring you profit. Apple's sales bring Apple huge profits. Samsung's sales? I don't know. I would prefer to see a chart of profits. I bet Apple still wins on that metric and that metric is the only one that really counts.
      toddybottom
      • RE: Smartphone wars: Samsung top dog...for now

        @toddybottom
        b4 all the fan boys would complain that its wasnt the os that mattered. and apple would sell more then any other company now they have moved to profit. iphone will have the same problem as blackberry by next yr. samsung up 44% iphone sales down 17%. and the galaxy nexus hasnt even been released yet.
        snoonw
      • @snoonw

        No, it's always been about profit, because if you aren't making money, you don't stay in business, no matter how many units you move. To pretend otherwise is to just be deliberately ignorant.
        baggins_z
      • RE: Smartphone wars: Samsung top dog...for now

        @toddybottom <br>Unless, you are a shareholder; profits are irrelevant. <br><br>Example, let's say Apple and Samsung sell approximately the same quality phone for $650. <br><br>Apple manages to produce it for $200 due to clever deals with suppliers, limiting models (which helps with suppliers and R&D). Samsung on the other hand produces it for $250. <br><br>Yes, Apple will make $450 and Samsung will make $400 so Samsung will make less, but why should I care unless I'm a shareholder. One way or another; I'm getting two equivalent phones for $650.

        Edit: Also, as someone pointed out below, Samsung basically makes their whole phone (or could if they wanted to) and they make parts of Apple's.
        anono
      • Not so fast!

        While profits are great, and what a company is in business for, the numbers are most important, because, without the numbers, which create visibility, and thus more sales, the sales and profits may disappear.<br><br>People, especially the young ones (tweens, teenagers, and even grade school ages), want what's popular, and if a product is not selling so hot with great numbers in sales, then the profits could be hurt and, poof!!, there goes that smartphone.
        adornoe
      • RE: Smartphone wars: Samsung top dog...for now

        @toddybottom These figures are depressing after watching the story of stuff lol. But seriously, Apple is the major player in terms of stability of apps and many other ways. i use the iphone for so many things, I have tries android and I actually like it but it can not compete with the iphone seriously.
        s_jarmin
      • RE: Smartphone wars: Samsung top dog...for now

        @toddybottom
        for software developers, it is very important to observe what is the smartPhone that most users are using. The profit of the hardware maker matters only for those who invest to their companies.
        sbVB
      • RE: Smartphone wars: Samsung top dog...for now

        There are certainly a lot of details like that to take into consideration. That is a great point to bring up. I offer the thoughts above as general inspiration but clearly there are questions like the one you bring up where the most important thing will be working in honest good faith. I don?t know if best practices have emerged around things like that, but I am sure that your job is clearly identified as a fair game. Both boys and girls feel the impact of just a moments [url=http://www.mitra-kerja.com]lowongan kerja[/url] pleasure, for the rest of their lives.
        balispeak
      • Smartphone app developers are mostly deluding themselves

        @sbVB
        It is probably more likely, and certainly far less costly, to win a lottery.

        There are relatively few successful apps, meaning that 99.999% of developers are NEVER going to break even, and most are not even going to make their first hour's effort back.

        They are likely to be more successful if they support an already profitable line of business. Companies spend $10ks or $100ks to do that!

        In Australia, Woolworths made a free app (iOS and Android) in which you could scan the barcodes of items in your pantry to make shopping lists that sorted the items by the aisles in your favourite store. I bet that cost them over $1m with all the back-end changes they would have had to do. It is a great app, and their developers are VERY responsive. Certainly much better than their main competitor's app.

        Then I see some that in drilling down some categories, going more than a few down the list and the apps have had about 10 odd downloads, and the programmers are still working at getting them better. Lot of ongoing effort.

        Now, target all web-enabled phones and there is a much larger market, but certainly not as glamourous.

        Target the basic facilities all phones have, and the market is HUGE. The XXX Idol franchises made millions with premium call voting, and that is certainly low-tech.

        Making an app that will appeal to enough people that actually want to part with their money is not trivial. It requires a clear target audience that has been identified as likley to use it, AND a plan to design and test it. AND have a way of getting it noticed. Most solitary app programmers are very unlikely to have all those skills, especially testing, which requires a mindset opposite that of programming (destructive vs creative).
        Patanjali
  • this isn't happening

    Clearly Apple is most awesome because they make more profits off of their customers than other companies make off of theirs. Why all consumers don't make this their top shopping criteria I just don't know.
    splamco@...
    • Say what?

      @splamco@...

      You lost me mid-way through re-read number 2...... :O
      rhonin
      • RE: Smartphone wars: Samsung top dog...for now

        @rhonin

        He makes a valid point. Apple fanboys are always so proud of the fact that Apple is overcharging them (high profit margins = overcharging).
        Qbt
    • RE: Smartphone wars: Samsung top dog...for now

      @splamco@...
      You are right. Let's all buy from ZTE because they make the least profit. Why all consumers don't make this their top shopping criteria I just don't know.
      anono
    • RE: Smartphone wars: Samsung top dog...for now

      @splamco@...
      Because clearly not everyone is an iFan like you. I don't like the idea of a company profiting off me excessively for a phone with no choice when I can find similar specs with various choice at fairer prices elsewhere.
      JOB83
    • RE: Smartphone wars: Samsung top dog...for now

      @splamco@... Surely, you are right with this point. I think all consumers will not make their criteria become real for shopping since there are lots of choices.
      superseostar
  • RE: Smartphone wars: Samsung top dog...for now

    I'd like to see how much of that "other" category was HTC just for fun. No I am not saying that they are ruling the market, it's just that they are the only "other" vendor I can think of.
    trybble1
    • Go Moto

      @trybble1

      :D
      rhonin
  • RE: Smartphone wars: Samsung top dog...for now

    And where is Motorola too?
    trybble1
    • RE: Smartphone wars: Samsung top dog...for now

      @trybble1 isn't part of Google now?
      pupkin_z