Samsung knocks Apple off the handset profit throne

“Apple has fallen off the profit throne,” Ryan Knutson reports for The Wall Street Journal. “Last quarter, Samsung Electronics made more money selling handsets than Apple for the first time, according to a report by Strategy Analytics. Samsung’s operating profit for handsets was an estimated $5.2 billion in the second quarter of 2013, according to the report. Apple, meanwhile, had an estimated operating profit of $4.6 billion.”

Knutson reports, “Apple also lost global market share while Samsung made gains. Apple’s share fell to 13.6% from 16.6%, the lowest it has been in three years. Samsung, meanwhile notched a 33.1% global market share, up from 31.1% last year, according to the report.”

“Apple’s smartphone shipments grew just 20% in the second quarter, well below the industry average of 47%, according to Strategy Analytics,” Knutson reports. “Samsung shipped a record 76 million smartphones, more than double Apple’s 31.2 million. Samsung was boosted by sales in China of its Galaxy S4 model, the report said. Apple has said it plans to make the iPhone 4 ‘more attractive’ in China, where the company recently saw sales slow.”

Read more in the full article here.

Related articles:
Apple holds Beer Bash as iPhone market share shrinks to three-year low – July 26, 2013
Samsung overtakes Apple as world’s most profitable phone maker – July 26, 2013

76 Comments

  1. I want apple to find a way to make the iPhone cheaper. It is totally awesome … and expensive. Totally worth it, but sometimes it is just too much to justify, especially if you don’t live down the street from an Apple Store.

  2. Okay lemmings… what do you have to say about this news? Other than realizing you have no explanation other than calling me a troll which will commence in 5…4…3…2…1 GO!

    Whatever. More and more are realizing what I’ve been saying – Apple needs a new CEO. Until that day arrives, get ready for more news like this and AAPL remaining stuck in collapse.

    1. Once again, analysts are taking Samsung’s “shipped” numbers and comparing those to Apple’s “sold” numbers. We have no idea how many Samsung phones are sitting on store shelves, in warehouses, etc.

      If you read the article, it states that most of the mobile handset growth came in the low end of the market. Obviously not where Apple’s playing right now, and also where profits are minimal.

      We also don’t know where they got their profit margins. Note they are clearly listed as “estimated”. Apple doesn’t break down its profits by product category, so these numbers (for both companies) are pure guesswork.

    2. Only one thing you where right about as you said in your own written word’s as no need to repeat them since you are aware of what you think your label is, now as for your assumption of what others may label your posting is anyone’s guess.

      Not a Troll as you seem to want the title so bad, since a much better to reflect your smug misgiving would be “Opportunist Asshole” it seems to cover the high regards of what you think of yourself as seen by others.

      1. I really love it when someone uses pathetic name calling like “Asshole” because it confirms to the two or three other smart people who visit the MDN world what a bunch of sophomoric contributors abound in these parts.

        1. Go fuck yourself you flame baiting jerk and take your smug superior attitude with you on the way out. D not return because your vast wisdom is neither needed nor appreciated here.

    3. Aren’t you so much smarter than us lemmings. You do know how these numbers are counted right? No?
      The iPhone 5 came out in September. This will be a very big Fall season for Apple. Don’t be so ignorant.

    4. Here is what you are missing Jay.
      First Samdung is not reporting finacials this is yet more AnalCyst conjecture based on Samdungs shipments of phone to their own warehouses in the us and other markets. These are not sold phones. I’m sure with 3 for 1 give always they will sell (give away) lots of inferior phones. Apple is about to do a refresh and everyone knows it they do it once a year typically and the same time September. Which if you own and can read a calendar is almost upon us. Some (Most) are waiting for this new phone to have the latest top of the line phone with the greatest ecosystem and best design. It’s not Samdung that innovates its Apple. Saying Samdung innovates is like doing a photocopy of the Mona Lisa and saying how much better the copy is. It’s cheap sometimes 2-1, 3-1 etc. the end of the day these are plastic slabs of cheap parts thrown together and rushed out the door with the latest hemroid os.
      I’ve used them they are crap. Settle if you must and tell yourself that its just as good or work a little harder and make a little more money and buy the real thing. Sorry to hurt your feelings but look at the demo graphics, how much iOS users spend compared to hemroiders. I hope you can read my reply and that you don’t have a virus preventing you from doing so. Love those droid viruses so open in all the wrong ways.

      1. If Samsung makes crap then why does apple use Samsung parts in its phones? You’re illogical because you are emotionally tied to a brand. Samsung provides the display, memory, memory controller, storage, and CPU for Apple products so when you spew stuff like Apple “makes”the best and Samsung just make crap it’s more than a little disingenuous mate. It’s also hard to follow you logically when your argument is so subjective. I mean OK we get it, you like Apple but so do the rest of us however being blindly loyal doesn’t help anyone. It doesn’t help Apple improve and it doesn’t help us, the consumer get better products. This kind of blind no matter how illogical or subjective loyalty only helps Apple keep it’s head in the sand and not compete. See at risk of sounding cliche, fans are like friends, the good ones will help you see your faults and help you improve and become better they don’t just always take your side no matter how right or wrong you are just because they like you. People who do that are called yes men and no one needs friends like that. What is really going on is this:

        1. Apple rightly sued Samsung for slavish copying
        2. Samsung started losing the PR battle as well as the legal battle because it was evident that they were obviously purposely copying apple design.
        3. Apple pushed harder
        4. Samsung got offended at the rightful accusations and got sick of all the copying press and thus the sleeping dragon was awoke.
        5. Samsung started improving their designs and listening closely to the market about what things matter to customers; features, display size, price points etc… All things the market and consumers talked about, Samsung listened closely and became nimble to execute.
        6. Apple continued its steady ship with the ideology of “we don’t listen to consumers or customers, it’s our job to figure out what they want or what’s best for them”. Real words by Tim Cook by the way.
        7. The love affair with Apple from the media, consumers, tech enthusiasts, and the market at large started shifting towards Samsung because they stepped their game and gave customers what they wanted.
        8. Now Apple has no room to be arrogant and complacent.

        Apple needs to put it’s money and design talent where it’s mouth is. What’s maddening about it all is that Apple has the money and design Talent, at least historically, to do something about this. They just choose not to because they think their products are inherently the best just because they made it and this false ideal is being fed by yes men like you. I like my iPhone 5 but the screen is still to small, I still can’t save files to my phone, I can’t use any alternate keyboards with swipe gestures, or better prediction/different features,I still can’t quick reply to messages from any app or anywhere in the OS without leaving the app I’m in and opening up the corresponding messaging app. These are all the options that Samsung and Android for that matter give the customer. So while Apple holds on to the “at least our phones are metal” and “theirs is broken and ours just works” taking points, android and Samsung are improving day by day and are recently beginning to ‘just work’. OK great you’re phone is metal and of better build quality, I agree 100%, but so what if you’re lacking features that help me get things done and that are useful to me and many other consumers?

        1. What Samsung makes for Apple is done according to Apple’s specifications. All of Apple’s phones start out as flagship devices, whereas a relative few of Samsung’s devices sold around the world are made of their top-of-the-line components. It is in this low-end market that Samsung has a sales, but not quality, advantage for now.

          Meanwhile,

          “Android is a wonderful operating system. But most Android phones are crap.” — Farhad Manjoo

          http://slate.com/articles/technology/technology/2013/07/android_vs_iphone_why_apple_still_has_the_edge_over_google_s_operating_system.html

    5. They have to sell more phones. They break and fail to work three times more often. That was compared tof the most reliable Samsung. I can see them selling more and more profit from cheap short term made phones. But, I will stick with the iPhone and save money over time, thank you.

    6. All I know is they didn’t sell any to me or any of my friends and family. In addition they will never sell any fridge, TV, computer or any thing else with the Samdung logo on it.

      I am slowly eradicating my house from all the Samdung stuff I used to buy back when I used to buy Samdung. No more…..EVER!

      Trolls like you only buy this junk because…..actually I don’t know why other than just to say you bought something to hate Apple with.

      1. Not my job to find a replacement for the failed CEO. It’s the responsibility of the bought=off board of directors. That they are negligent in carrying out their duty to make decisions in the best interest of the owners of the company is something that a number of us have brought to the attention of the SEC.

        1. @ Jay Morrison
          Anybody make critical comments about any person or any topic. I would suggest it IS your job to make a positive contribution — rather than merely repeating these vacuous negative talking points ad nauseam.

      1. I am obsessed about the travesty of the once great company going into the realm of ordinary. I am obsessed that no one on the board of directors seems to care that their employee constantly lies about “great products in the pipeline” and we never get to see anything other than tweaks, updates, and turning the iOS into a world of sissy. Obsession to bring change is how change gets accomplished. It’s time for change at Cupertino. I’ll remain obsessed until we get someone in the CEO’s office that is capable of protecting and extending the legacy of the company that transformed the world.

        1. Forgive me, but there is nothing remotely ordinary about Apple. They have fantastic devices that I have yet to see anything work as flawlessly together or apart. In comparison to Samusung or Microsoft or Intel or whoever else, there is no comparison. You just have to use one of the new Apple laptops to see.

    7. Jay, you aren’t a troll because of this post. You are a monotonous, trolling moron because of the hundreds of similar posts that you have made. Most of the people on this forum are fine with the truth, even if it is unfavorable to Apple. But your “truths” are generally just you own opinions. We can disagree with your interpretations of data without being blind to the truth.

      If you squawk negative things often enough, then you might eventually be correct about something. But that does not obviate the hundreds of times that you are wrong. We just don’t care about your opinions because they have generally proven to be worthless.

    8. But Jay, don’t you know the “new” iPhone 5S will be coming out in three months and, even though it will be a mere tweak to the current iPhone 5 (which was a tweak to the iPhone 4S, which was a tweak to the iPhone 4), it will bring the shine and market share back to Apple.

  3. I call bull$hit.

    Shipped vs sold and padded numbers. Hey, even Nokia can show they still sell the most phones if you look at data a certain way.

    My two cents.

    1. Exactly. Apple reports on phones actually sold while Samsung reports on phones “shipped”. The same tactic used by Microsoft to brag about the “success” of the Surface tablet. After almost a billion dollar write-down for the Surface by MS we all know the real truth.

      Although how things are reported can make a huge difference, it may well be that cheap iPhone knock-offs are outselling the iPhone. Simply because Hyundai sells more cars than Mercedes doesn’t make Hyundais a better product.

      Personally if Apple ever stoops to making iPhones as poorly as their wannabe counterparts…I’ll sell my stock. Until then…

    2. I agree and what should also be considered, Samsung makes a ton of different model phones, Apple is doing pretty darn good making money with a handful of models, both current and discontinued. Apple sells and Samsung ships….there is a difference in how the math is done. Google also ships and so the math goes.

  4. The key word is handsets.. not just smartphones.

    As they say in their report: “The term “handset” includes all smartphones and feature phones combined.”

    Might as well have thrown in their fridge division as well to claim they beat Apple, who only makes one type of product.

    1. Dude, what about the previous three or four years when their flagship smartphone debuts didn’t line up and Apple still kicked Samsung’s ass? What about 2012 before the iPhone 5 debuted? Did Samsung make more profit in that quarter? Stop the excuses. In years past Apple wiped the floor with the phone industry no matter the quarter.

      This isn’t some freak anomaly, it’s part of a trend. Samsung has been creeping up behind Apple, stealing more and more of the high end smartphone market from right underneath their feet. The fact of the matter is that Apple hasn’t been nearly as aggressive as they should’ve been in protecting their territory while carving new frontiers in the high end smartphone segment.

        1. Samsung doesn’t have a growing presence in the high end of the market? Where in the article did you read that? Do you mean to tell us that the Galaxy S4 isn’t a high end smartphone?

          1. I meant their profit is derived from volume the low end of the market, as it is clearly stated in the article. They troll the cisterns of the market with 900 models of barely-smartphone feature phones that may as well be shipped directly to landfills to save on fuel.

            The S4 is a widely-recognized flop that failed to sell in the volume Sammy wanted, which is why sales actually fell 3% in its launch quarter.

      1. “This isn’t some freak anomaly, it’s part of a trend.”

        It’s a blip. You can’t portray a trend from the first instance of a blip… I’d wait for another blip before taking such action. BTW, Your definitive opinions seem awful contrived and yearning for a result. Go back to Samsung school and concentrate on believability as your main target.

        1. Right. You need a long time series before daring to extrapolate, and even then you could be way off, because of systemic bias, boisy data, or anomalous grouped outliers. In an evolving market situation, novel influences may come into play. And then there is the stupidity factor, never to be underestimated. Finally, even statistical certitude can be outwitted by smart gamesmanship or patient stewardship. Ten million people can be proven wrong by a flip of the switch. Disruption theory is one example.

    1. Is that not the nature of business? Exploiting your advantages in order to gain on your competition? They did what they had to do to get the job done. What is Apple supposed to get brownie points because their smartphone portfolio is severely lacking in diversity?

      To grow market share and profits at such a steady clip is an amazing feat. Samsung is kicking Apple’s ass, I don’t care how they went about it.

      1. Yes, you and Michael Dell both have an amazing grip on how to run a business.

        Business is: lowest effort for maximum return. Apple doesn’t break a sweat while Samsung sprints balls-out, yet they both reach the same profit goal, withing a few percentage points.

      2. To steal a product and ship a cheap copy of it is not ethical. If you support that ‘advantage’ and think copying is ‘competition’ then you have a long way to go in your development as a person.

  5. Samsung pushed its slave workers to produce and ship 2.4 times more mobile phones than Apple. Of course, Samsung does not break down shipment numbers or how many units it actually sold. Much of this is Strategy Analytics educated guessing based up how much they can pull out of their arses. Nevertheless Samsung posted total operating profits at $6.9 billion. How much of that came from its mobile phone division is a guess, maybe around 2/3rds if you play with the numbers.

  6. Competition is good for Apple, Inc. While Apple was best following Steve’s triumphant redux, I have no qualms with Tim’s stewardship. I like the team and the focus the company has to pursue excellence. Let the evaluations come and let the perspective be built upon track record. I have no doubt Samsung and Apple both will continue to achieve excellent returns for the indefinite future.
    But we all know which platform is superior when the intangible awesome sauce factor is considered along with all the raw data.

  7. This was inevitable. Samsung is a huge company and willing to sell tens of millions of so-so quality smartphones, each at an acceptable profit margin, with no concern for customer satisfaction. Collectively that’s going to add up to a lot of profit. Apple is all about building the best stuff it can, and that means a higher cost and profit per unit. Its customers love their iPhones and eagerly await each new iteration. The iPhone remains the most coveted smartphone in the world, and even when a huge company like Samsung can collectively crank out enough units, and dozens of models, to collectively exceed Apple’s collective profit totals on its one iPhone, that doesn’t make Apple’s flagship any less desirable.

    Apple is just entering into the same iterative process it followed with the iPod. With its top of the line product approaching market saturation, the time has come to start filling in the lower price niches, just as it did with the iPod. The lower cost iPhone models will have fewer of the flagship features, but will still provide the traditional Apple quality people have come to expect. It will give those customers an entry into the Apple ecosystem and build the client base.

    This is all obvious, and follows Apple’s tried and true approach of focusing like a laser on its market. Apple is never going to flood the market with crap to con people out of their cash for short term gain, and will certainly never do anything to intentionally harm its brand. It takes time to engineer new models, decide on what features are most important in priority, and package it all up, then crank up production to get out millions of units on day one.

    They’ve done this before, and will again, so stay calm. Apple continues to sell everything it can make. No one is eating their lunch.

  8. How many times is macdaily going yo regurgitate the same bogus misinformation… Are thy getting paid by samsung too?

    Comparing the slowest quarter of apple to samsung quarter with new s4 release… Is absurd
    How about ttm profit. Samsung 22.7 b.. Apple 38 bil.
    Apple profit margin 24% …samsung 12%
    To cherry pick ( rather extract) a number from samsung report (which does not itemize its report)to make samsung look good Is the work of only one type of analyst.
    A samsung btibed misinformer !

    1. It’s not about any specific data points, it’s about the trends. In years past there was NEVER a quarter where Apple didn’t clean Samsung’s clock in profit share, regardless of a Galaxy flagship debut or not. iPhone and Galaxy releases have almost always been incongruous yet Apple never relinquished their crown quarter after quarter after quarter. If the trend holds, then Samsung will eventually have the total year smartphone profit crown if Apple is reduced to only wearing it for a single quarter after a new iPhone debuts.

      You guys talk like Apple and Samsung are used to going back and forth when it comes to profit. That might be the case now but for the past three or four years Apple never shared their crown for a single quarter. It’s news because it’s the first time another phone maker has worn the crown (for even a single DAY) since Apple snatched it from Nokia in like 2009. Will Apple get it back in the next quarter or two? Probably so, but it won’t be by a wide margin and they’ll remain in danger of giving it right back up. That appears to be the new normal (unless Apple changes the game again).

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