Hardware 2.0

Adrian Kingsley-Hughes

Samsung overtakes Apple as world's top smartphone maker

By Adrian Kingsley-Hughes | October 28, 2011, 4:51am PDT

Summary: ‘Cautiously optimistic’ over fourth quarter outlook.

Samsung, the relative newcomer to the smartphone market, has surged past Apple during the July to September period to become the world’s top smartphone maker.

Samsung, which only started selling smartphones in any volume last year, experienced a 44% jump in shipments to 27.8 million units during the third quarter (an estimate by Strategy Analytics), up four-fold on the year ago quarter. By comparison, iPhone sales fell by 16% to 17.1 million units during the same period.

[UPDATE: Note the key word there ... 'shipped,' not 'sold.' There is a difference. Shipped is handsets delivered to retailers, whereas sold is just that ... handsets sold. Apple always quotes number of handsets sold.]

Samsung held 23.7% of the smartphone market during the third quarter, giving it a nine point lead over Apple.

“I am cautiously optimistic on the fourth quarter outlook at this point,” Robert Yi, head of Samsung’s investor relations, told analysts.

Samsung also expected demand for other mobile devices, such as tablets, to remain strong. Server sales also expected to be strong. Bad news when it comes to PCs sales though, which are expected to remain weak.

Is Samsung a serious long-term threat to Apple, or were people put off buying an iPhone because of all the talk of an updated model?

Related:

Smartphone wars: Samsung top dog…for now

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Topics

Samsung Electronics Co. Ltd., Apple Inc., Smart Phones, Cellular Phones, Handhelds, Consumer Electronics, Personal Technology, Hardware, Adrian Kingsley-Hughes

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology.

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RE: Samsung overtakes Apple as world's top smartphone maker

Horus418 31st Oct

@aiellenon, you should go and read some about Samsung, they make EVERYTHING! Ships, heavy plant machinery, buildings (half of the Petronas towers, if I remember right), banking, investments, computers, servers, phones, tablets, virtually everything you can think off Samsung make. Another reason Apple should watch who it steps up to the mark with. Samsung own real patents not scratches on beer mats.

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Apple has peaked, it's downhill from here

Tim Acheson 28th Oct

Apple has peaked -- it's the beginning of the end of their moment of glory.

With a long, long history of fighting hard for a few percent of the market share in their own core markets, Apple quickly grew bloated during the period of success that followed getting lucky with iOS.

Apple's marketing department practically invented the smartphone, but now Samsung alone has easily overtaken Apple's smartphone sales figures. Apple is destined to be left behind.

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Once more

timiteh 28th Oct

@Tim Acheson
Apple does not invent the smartphone, it just reinvent the smartphone U.I as well as turn it to a more limited though way more optimized device.
I used to use Nokia smartphones years before the iPhone was released and there were quite powerful though not optimized at all and with underpowered hardware.
This said, it is not sure that iPhone has peaked,especially as there is an insane number ofApple fanboys who will fullfill iPhone sales for the years to come, but it is sure that it will be more and more harder for Apple in the market.
Especially as it is now clear that Apple never intent to compete with Android but just want to destroy it.
Fortunately for Apple, not enough potential consumers are aware or care about this infamy but i am pretty sure that both Google and OEM are ready to fight until death and could come with some extremly appealing devices agaisnt whom Apple would not be able to use its favorite weapon against: Lawyers.

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Apple's big contribution was marketing

Tim Acheson 28th Oct

@timiteh Good point. What does "smartphone" even mean. The big difference Apple made was marketing the concept.

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RE: Samsung overtakes Apple as world's top smartphone maker

ashwinipn 28th Oct

@timiteh
I loved your post... for its objectivity and putting things in perspective..... In fact, first I thought the best paragraph is the first one... but eventually could not decide because of the impartial undertones throughout your post.... Indeed a treat compared to pathetic and laughable comments by various trolls. Thanks...

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RE: Samsung overtakes Apple as world's top smartphone maker

rengek 28th Oct

@timiteh
To me the big thing is marketing. Apple has marketed ferociously for several years now. Not just colorful commercials, but they find ways of sneaking their laptops all over tv shows. That has been their strength. But the problem with PR work on something perceived as new and cool is that eventually its no longer new and cool. No material product can remain that fresh and desirable. After a while even if the commercial is new and slick, the product will have been stale. Just how many ways can you dress up a cell phone to make it seem cool and fresh. Elmos don't sell as well for the same reason. Its just not the product thats in style anymore.

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RE: Samsung overtakes Apple as world's top smartphone maker

xplorer1959 28th Oct

@timiteh Well said!

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RE: Samsung overtakes Apple as world's top smartphone maker

regsrini Updated - 28th Oct

@Tim Acheson
I think you are totally wrong about Apple peaking. They are in fact just getting started in Asia, where their presence has increased by 100% over the last year. Consider this, 21% of their sales is to Asia-Pacific as compared to 13% last year. There will be a time in the near future, where the US will only be the 3rd or 4th largest market for Apple. You may be right about Apple peaking in the US, but not worldwide, where they are just entering mainstream.
http://allthingsd.com/20111027/apple-asia-pacific/

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RE: Samsung overtakes Apple as world's top smartphone maker

Pete "athynz" Athens 28th Oct

@Tim Acheson Point by point:

Apple has peaked -- it's the beginning of the end of their moment of glory.

Doubtful... I have a feeling sales were impacted by the tech media going all out on the iPhone 5 rumors and given the iPhone 4S is - despite Siri - an incremental upgrade... I think sales will jump back up with the release of the iPhone 5.

With a long, long history of fighting hard for a few percent of the market share in their own core markets, Apple quickly grew bloated during the period of success that followed getting lucky with iOS.

Right, right and the iPod and iPad markets are what then? unless you man by "core markets" you are referring to Macs...

Apple's marketing department practically invented the smartphone, but now Samsung alone has easily overtaken Apple's smartphone sales figures. Apple is destined to be left behind.

Spoken like a truly hopeful ABAer. It's entirely possible that iPhone sales will fall - I doubt it but it is possible.

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I agree

toddybottom 28th Oct

@Pete "athynz" Athens
"I think sales will jump back up with the release of the iPhone 5."

There was an article on ZDNet a little while ago that talked about the iPhone 5 and how that was the phone that Apple wanted to release but it simply wasn't ready in time. Count me in as one of the tens of millions who are waiting for what Apple couldn't get done in time for 2011. I think it will be great.

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Samsung makes more money than Apple in smartphone market?

toddybottom 28th Oct

I'll need to see proof of that before I believe it.

Otherwise, Apple is still winning.

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RE: Samsung overtakes Apple as world's top smartphone maker

AdnanPirota 28th Oct

Great news for all freedom loving people of the world, if all smartphone producers will embrace Android there would be no poverty in the world, I knew that there is more reasonable than unreasonable human beings in the world ...

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In other news, Ford sells more cars than BMW

HollywoodDog 28th Oct

Ford sales blow past Rolls as well.

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RE: Samsung overtakes Apple as world's top smartphone maker

rlorenz 28th Oct

@HollywoodDog Except that Android devices cost the same as Apple devices. So there's no price difference between a 'droid and an iPhone, like there is between a Ford and a Rolls Royce. Not saying Apple won't re-top Samsung in the future, but just saying the comparison doesn't hold up.

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RE: Samsung overtakes Apple as world's top smartphone maker

rengek 28th Oct

@HollywoodDog
30% of an iphone is samsung. 30% of a rolls is not ford.

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RE: Samsung overtakes Apple as world's top smartphone maker

larkforsure 28th Oct

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RE: Samsung overtakes Apple as world's top smartphone maker

Badgered 28th Oct

So that's why Apple was so dead set on getting Samsung devices banned everywhere.....

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RE: Samsung overtakes Apple as world's top smartphone maker

123techie123 28th Oct

@Badgered
The strange thing about the Apple-Samsung patent wars is that Samsung is one of the major parts suppliers for Apple and the iPhone.

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The Price of not willing to supply all markets equally

rhon@... 28th Oct

Samsung treats all of it's customers equally. They do not supply old phones to emerging markets for a new model price. Samsung is located in the heart of Asia. Asians are willing to buy Apple, they do not like it when Apple sells the new stuff 6 months to a year later to them than to the Americans and Europeans. In the end this will come back to haunt them.

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Marketshare Is One Measure, But Making a Profit is a Key Measure as Well

Arizona John 28th Oct

Apple is dead set about Samsung, as well as any other manufacturer using their IP. That's why some jurisdictions have banned Samsung.

Market share should never be confused with the point of being in business, to make a profit. Apple puts all the other manufacturers to shame. Selling a product at a loss or low profit is rarely made up in volume.

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RE: Samsung overtakes Apple as world's top smartphone maker

littlemas2 28th Oct

@Arizona John Actually this is not completely true. The point of being in business is to increase the wealth of the owners. By increasing market share and brand recognition it is likely that Samsung has significantly increased their stock valuation. You can even be running at a loss but still be increasing your wealth. A good example of this is in professional sports teams which can sometimes afford to lose money year after year, but because the value of the team is rising the owner is still getting wealthier.

Apple is making a profit, but with the loss of Jobs their stock has recently taken a hit. The question is whether or not they will continue to be able to make the same kind of profit in the future if they do not keep their dominance in certain markets. If people perceive they are not able to keep up then their stock price will begin to fall.

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Apple's stock has taken a hit? Huh?

ManoaHI 28th Oct

@littlemas2@... I'm not entirely sure where you are getting your prices from, but Apple stock price has gone up since Jobs' death. I agree that the stock price might fall if (potential) INVESTORs perceive that Apple is not going to keep up or surpass other competitors.

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Misleading statements

seaniepie 28th Oct

Bear in mind that this is based on figures of shipments from Samsung, not retailers. The number sold to end users is likely far less than those sold to the retailers.
Also, July was a couple of months before Apple was to release the iPhone 5 (as it was then thought to be but became the 4S) so this too may have a bearing on the reduction of it's sales volume.
This too just before the injunctions against the GalaxyII. I'm a Samsung fanboy but these figures seem a bit fishy to me.

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RE: Samsung overtakes Apple as world's top smartphone maker

ManoaHI 28th Oct

@seaniepie Keep in mind that the iPad 3 is to come out early next year. I like both Samsung and Apple. I just got a Galaxy Pad 10.1 and it's great, its a keeper! Doesn't mean that I won't get an iPad 3 when it comes out. I have had the iPhone since its initial release and skipped every other phone to prevent early termination fees.

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RE: Samsung overtakes Apple as world's top smartphone maker

gtatransam@... 28th Oct

Stupid Apple Zombies...
No Java
No Flash
No SD
No USB
No Bluetooth (ipad)
No Multi-tasking
No HDMI
No 4G
No Widescreen (ipad)
Must use the itunes virus
Must be programmed in objective c (suck)
SDK = 300/Year + High Upload Fees to App Store
Half the CPU
Half the RAM
Twice the Price

Droid solves ALL those problems:
Java
Flash
SD
USB
Bluetooth
GPS
Multi-tasking
HDMI
4G
Widescreen
No itunes (Hurray!)
Programmed with Java/Eclipse (easy)
SDK = Free + Free Upload to App Store
Twice the CPU
Twice the RAM
Half the Price

Apple makes NO sense from a business point of view.

Steve (Jobs in China) gets an A+ for Marketing to the sheeple and an EPIC FAIL in technology.

re: iphone/ipad vs Droid

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RE: Samsung overtakes Apple as world's top smartphone maker

seaniepie 28th Oct

@gtatransam@...

Ok, I'll bite:

No Java - Ok, this does suck. Java would be good
No Flash - Not a fan myself. Adobe still haven't brought up its specs yet
No SD - Yes it is (via adapter)
No USB - No need, everything is wireless. What do you need to plug in? a HDD?
No Bluetooth (ipad) - Jeeze, really! Bluetooth has always sucked and continues to blow fish
No Multi-tasking - 3 years ago. We now have full multitasking
No HDMI - (via adapter)
No 4G - No (decent) 4G suppliers yet
No Widescreen (ipad) - For what reason do we need it?
Must use the iTunes virus - This is a good thing.
Must be programmed in objective c (suck) - And Javascript, and C and Unity, and LiveCode (sounds like you copy pasted this from a few years ago)
SDK = 300/Year + High Upload Fees to App Store (Try $99/year or ??59/year and NO UPLOAD FEES - there never has been)
Half the CPU - to what? That's not a comparison!
Half the RAM - ditto
Twice the Price - ditto. If it was a proper comparison you would compare the price of an equal spec'd machine or the spec to an equally priced machine.

Your debate is very flawed.

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RE: Samsung overtakes Apple as world's top smartphone maker

seaniepie 28th Oct

@gtatransam@...

Apple makes NO sense from a business point of view.

That's a very presumptuous statement too. Some businesses care not about the aforementioned.

Plus, any developer worth his wares makes sure he understands the limitations of all devices and caters to the needs of the client by developing for the device that is best for them. I code for all devices but by far the one that my clients go for is the iPod or iPad because they know the functionality of every device it will be delivered to - no second guessing what resolution or CPU or accessibility a range of Android (or Haemorrhoid as my clients now call it) devices might or might not have. Saves me the time in creating layouts for all these varying resolutions. I only have 3 (so far) to think about with Apple - despite the lack of widescreen on an iPad (which is a stupid argument anyway)
Pi

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Model changeovers?

Ken_z 28th Oct

It's not difficult to see a dip in sales with "something new" being so heavily pushed in the media. Now that the 4S is out we can soon look at a full quarter's sales and see how it performs.

And on the other side of the coin, we can try to figure out who makes the best profits off of their mobile divisions. When you throw in the AppStores the winner is even more pronounced.

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RE: Samsung overtakes Apple as world's top smartphone maker

danbi 28th Oct

What is Apple's profit from smartphones and what is Samsung's?

You can get quickly get market share, by selling lots of low-margin products , but in the long run this will only hurt, because while customers do appreciate keeping or lowering the price, nobody will be loyal when you rise it.

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RE: Samsung overtakes Apple as world's top smartphone maker

bdixon1@... 28th Oct

@danbi
what makes you think it's low margin product and are you infering that apple has high margins? if so then they are ripping people off.

From what i can see, BOTH hand sets cost consumers about as much.. the subsidies from the telcos are about the same on a 2 yr contract.. $199.
So, the question is who cares about margins from our side??? its all about market share..

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Too bad Samsung doesn't care about security...

concernedITpro 28th Oct

All I can say is, we don't allow Samsung devices because their security is terrible. None has ever passed our security requirements.

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RE: Samsung overtakes Apple as world's top smartphone maker

reefsalt Updated - 28th Oct

@concernedITpro

Also they probably have the worst "end user" customer service in the market for their products(all),this is from first hand experiences with them.

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RE: Samsung overtakes Apple as world's top smartphone maker

littlemas2 28th Oct

Apple has peaked unless they can continue to bring out revolutionary products. From a business model standpoint Apple is in the Cash-Cow mode right now, and unless they can continue to bring out devices that are far superior to others they will simple become one option among many.

Samsung, HTC, Motorola/Google are innovating at a faster rate, so they have not only caught up to Apple performance in many respects, in some respects they have past them by. The new stuff Apple is bringing out now is often a response to what the Android market has already had.

My Apple fan friend who keeps giving me his "old" stuff just showed me the cool new iOS 5 trick of a pull down options from the main screen. Well hasn't such a thing been available on Android from the beginning?

I think Apple will keep a good market share because they continue to make high end very reliable, very usable devices and some people want the best and can afford to pay for it. The common person market though is going to go for cheaper and still pretty rocking Android or Windows devices.

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RE: Samsung overtakes Apple as world's top smartphone maker

littlemas2 28th Oct

Also, I think the Apple vs Samsung lawsuits are going to be completely irrelevant soon. I mean go ahead and ban certain Samsung products. They seem to be able to put out multiple products at a very quick rate. They can put together a new phone or tablet with a slightly different look but with the same or better specs within a matter of months. The older Samsung Apple look alike products are not necessary for them because they now have enough name recognition in the market not to need to copy Apple's look (which they obviously did with the first Galaxy phones and tablets). Furthermore, Apple products have been changing enough that the new phones and tablets to not look that much like the Samsung products other than that they are all glass rectangles.

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RE: Samsung overtakes Apple as world's top smartphone maker

reefsalt 28th Oct

Its good you put the following [UPDATE: Note the key word there ... 'shipped,' not 'sold.' There is a difference. Shipped is handsets delivered to retailers, whereas sold is just that ... handsets sold. Apple always quotes number of handsets sold.]

Its good that other companies are becoming more relevant in the market place, it will create better products for the future and keep Apple on its toes,to continue offering a user friendly product.

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pay up

heymull 28th Oct

@toddybottom
Don't worry, there are lots of people willing to pay anything to get their hands on an Apple device. Apple wins when they get their hands in your wallet. yes, your wallet.

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RE: Samsung overtakes Apple as world's top smartphone maker

aiellenon 29th Oct

Samsung makes servers and PCs? I've never seen or heard of either. I also don't know a single person who has bought an ipod (any kind) in the last 5 years (and still has it, I know two that bought an ipod touch and then either sold it or returned it or traded it in).

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RE: Samsung overtakes Apple as world's top smartphone maker

pamandua2@... 29th Oct

Some people so pathetic taking side either pro Apple or pro Samsung. You should be please live in an open society & freedom of choice. Don't be double standard you want democracy but act like totalitarianism.

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RE: Samsung overtakes Apple as world's top smartphone maker

MrElectrifyer 30th Oct

@pamandua2@... Common ZDNet!!! Add ratings to your commenting system, just like your sister site TechRepublic, really need to +10 this one!

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RE: Samsung overtakes Apple as world's top smartphone maker

Horus418 Updated - 31st Oct

I think this is more to do with the markets most of these Asian companies already have, Samsung own Korea lock, stock and barrel. I can also see that all the other manufactures, Sony, Nokia, Sanyo, Panasonic, etc. etc. will have little worry when it come to a company that only really makes one phone product, yes you can get the older models but there is not a multiple choice offered, unlike all the other companies that can sell you a product within your financial bracket.

Apple has shot it's bolt, I am sure they will steal another product and make it theirs, put it in a nice case and preach how they are the great inventors of everything. When in fact they are just polishing old products.

The other problem is that Apple has been suing everybody and their brother, this makes for a very difficult situation for Apple as they don't make any of their own components and have to rely on companies like Samsung. These companies will do business when it suits them but what happens when they get better offers for the same component from their "friends"?

Too many patents, too many silly lies and a locked down system that makes it ill equipped for the real hardc*re (cannot put hard and core together come on ZNET!) user. The funniest thing about all the BS that has come out since SJ Uninstall was the wish for the death throws of Android, that is something that not even SJ spin could make believable.

Good luck Apple but I for one will not cry when you are put back in your place with 10-20% market share. Even the tablet market it turning, only the patent rows are stopping a total whitewash of the iPad (which lets face it is not as good as a 200 dollar tablet in usability).

I don't hate Apple I just wish they would leave the real inventive companies to get on and invent without all this stupid inane patent rows, i.e. turning a device on with a swipe of the finger. Loonyville.

Like most people, with a brain, the Galaxy is by far and away a better, more robust, open device than anything Apple has to offer. If you want to be puerile it's better looking also.