Boomerang: Slow-selling Samsung Galaxy Tab has 16% return rate, 8x higher than Apple’s hit iPad

Apple Online Store“The Galaxy Tab, Samsung’s answer to the iPad, might better be called the boomerang as one Wall Street firm has found that an eye-popping 15 percent of those sold are being returned,” Garett Sloane reports for The New York Post. “The Galaxy Tab is a slow-seller, as well, according to analysts.”

“The 15 percent return rate, which covers sales from its November debut through Jan. 16, compares to a 2 percent return rate for Apple’s iPad,” Sloane reports. “‘Consumers aren’t in love with the device,’ said Tony Berkman, a consumer tech analyst with ITG.”

MacDailyNews Note: John Paczkowski reports for AllThingsD, “ITG Investment Research tracked point-of-sale data from nearly 6,000 wireless stores in the US from the Galaxy Tab’s November debut through Jan. 15 and found the device to have an unusually high return rate. According to its estimates, cumulative return rates for the Galaxy Tab through December of 2010 were about 13 percent. Worse, that percentage is growing as holiday purchases are returned. ITG figures cumulative Galaxy Tab return rates through January 15 were 16 percent.”

Sloan continues, “The problem with the Galaxy has been well-chronicled. Samsung rushed the product to market to compete with Apple and relied on software that was never meant to be used for a tablet device. Google even cautioned that its software, nicknamed Froyo, was not designed for tablet computing, noting that it was developed for smartphones and their smaller screens. Rhoda Alexander, an iSuppli analyst, said, ‘There are a lot of issues with Android tablets, not just Samsung. A lot of those products have difficulties with high return rates or with not moving off the shelf.'”

Read more in the full article here.

MacDailyNews Take: Lumps of Christmas coal returned. “My Aunt Edith made a mistake. Give me my refund, so I can use it to buy what I really wanted, an iPad.”

How embarrassing for Strategy Analytics!

I’d like to comment on the avalanche of tablets poised to enter the market in the coming months. First, it appears to be just a handful of credible entrants, not exactly an avalanche. Second, almost all of them use 7-inch screens as compared to iPad’s nearly 10-inch screen. Let’s start there.

One naturally thinks that a 7-inch screen would offer 70% of the benefits of a 10-inch screen. Unfortunately, this is far from the truth. The screen measurements are diagonal, so that a 7-inch screen is only 45% as large as iPad’s 10-inch screen. You heard me right: Just 45% as large.

If you take an iPad an hold it upright in portrait view and draw an imaginary horizontal line halfway down the screen, the screens on these 7-inch tablets are a bit smaller than the bottom half of the ipad’s display. This size isn’t sufficient to create great tablet apps in our opinion. While one could increase the resolution of the display to make up for some of the difference, it is meaningless unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of their present size.

Apple has done extensive user testing on tough interfaces over many years and we really understand this stuff. There are clear limits of how close you can physically place elements on a touchscreen before users cannot reliably tap, flick, or pinch them. This is one of the key reasons we think the 10-inch screen size is the minimum size required to create great tablet apps.

Third: Every tablet user is also a smartphone user. No tablet can compete with the mobility of a smartphone; its ease of fitting into your pocket or purse, its unobtrusiveness when used in a crowd. Given that all tablet users will already have a smartphone in their pocket, giving up precious display area to fit a tablet in their pockets is clearly the wrong tradeoff.

The 7-inch tablets are tweeners. Too big to compete with a smartphone and too small to compete with an iPad.

Fourth: Almost all of these new tablets use Android software, but even Google is telling the tablet manufacturers no tot use their current release, Froyo, for tablets and to wait for a special tablet release next year. What does it mean when your software supplier says not to use their software and what does it mean when you ignore them and use it anyway?

Fifth: iPad now has over 35,000 [now over 60,000 – MDN Ed.] apps on the App Store. This new crop of tablets will have near zero.

And, sixth and last: Our potential competitors are having a tough time coming close to iPad’s pricing, even with their far smaller, far less expensive screens. The iPad incorporates everything we’ve learned about building high value products from iPhone, iPods, and Macs. We create our own A4 chip, our own software, our own battery chemistry, our own enclosure, our own everything. And this results in an incredible product at a great price. The proof of this will be in the pricing of our competitors’ products which will likely offer less for more.

These are among the reasons we think the current crop of 7-inch tablets are going to be DOA. Dead On Arrival. Their manufacturers will learn the painful lesson that their tablets are too small and increase the size next year, thereby abandoning both customers and developers who jumped on the 7-inch bandwagon with an orphaned product.

Sounds like lots of fun ahead.Apple CEO Steve Jobs, October 18, 2010

[Thanks to MacDailyNews Readers “Jax44,” “JES42,” and “Dan K.” for the heads up.]

26 Comments

  1. Only 15-16% return rate? This means that 85% are sticking with their sub-standard piece of garbage. This is nothing less than a sad statement on the expectations and/or intelligence of a lot of people out there who are willing to settle for less when something so much better exists.

    Sad that they can reach such a high non-return rate. 🙁

  2. Two nits … a) I believe 7″ vs 10″ comes to 49% while b) the iPad doesn’t include much learned from the iPhone given that the iPad was designed first then postponed while Apple rushed the iPhone to the front of the queue and c) if you were warned the OS wasn’t designed for 10″ screens, wouldn’t YOU cut your screen to 7″ (and pray)?
    They WILL come out with a revised OS that will deal with a 10″ screen. You better believe that. You also need to be aware that the next wave will make this group look like the junk it is. The question will be, how do they compare with the Gen 2 (or 3?) iPad Apple is shipping when they arrive.
    Most important: you don’t have to be the best, just “good enough to meet the customer’s needs”.

  3. MacMan, why are these people returning them? Are they broken out of the box? Or do they fail to fit the user’s needs? In either case, a return is the obvious solution. But … if they are not broken and if they meet the user’s needs, why should they be returned? Because another model might meet more needs? Ones the user doesn’t have? If that’s your logic, it would be YOUR intelligence we should be questioning. Just because Dr. Who’s sonic screwdriver is worlds better than my Dad’s (dead, now, for 40+ years) hammer does not mean that when I need a hammer I should choose the “better”, but inappropriate, tool.

  4. “…cumulative return rates for the Galaxy Tab through December of 2010 were about 13 percent. Worse, that percentage is growing as holiday purchases are returned.”

    Holiday purchases.
    We can all hear the chatter as the Christmas presents are unwrapped, and the ribbon is pulled off the Galaxy Tab.
    “Look, Jenny! Here’s that iTablet you said you wanted!
    I know you asked for an ‘Apple’ one, but the sales guy said you’d be happier with this one because it can play FLASH and it has more ports on the side!
    Isn’t Wal-Mart great?! “

    Jenny smiles politely as she winces inside, and makes sure that all of the Tab’s packaging is kept together to facilitate a smoother return, as soon as possible.

  5. If Steve the Messiah was right about the display size, the tablet rivals will be screaming and cursing their blasted luck for refusing to listen to him. The iHaters keep confusing arrogance with careful consideration and product testing for target users.

    I could easily live with a 7″ screen for many tasks but with the Tab not having a tablet OS, I’m not sure I’d like that at all. A 7″ display is still better than the iPod Touch display and I’m satisfied with that for my particular needs. However, it doesn’t even come close to the iPad and I believe consumers just PREFER larger screens. The netbook started out with a small screen and people kept asking for larger displays and eventually they’ve grown to 11″ so I figure consumers prefer larger screens to smaller ones.

    I hope those Tab returns were due to the smallish screen size so it will give the iPad a selling point advantage for another year. I know the wimps will complain about the iPad 2 still being too heavy to hold in one hand, but I’ll take a uni-body aluminum case over a plastic one any day of the week. It’ll be more solid and generally tougher. I know Apple can’t make profit from using carbon-fiber, so I’ll settle for the extra weight to get the strength.

    To me, who was a teenager in the 1960s, find even the cheapest Android tablet something amazing compared to what I grew up with so I tend not to be too critical. I do understand quality vs pricing, so I don’t expect much from rival tablet makers.

    Apple’s scale of economy is going to be too much for rival companies to overcome. The more iOS products Apple sells the more money they’ll save and eventually a tipping point will come where most rivals can’t compete in the quality department and still make a profit. It may have already happened. We’ll see this year.

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