“Samsung Electronics Co Ltd is losing smartphone ground not only to cheaper Chinese rivals but also at the high end to Apple Inc., a survey showed, in an ominous sign for the South Korean giant as Apple readies to launch its next-generation iPhone 6,” Se Young Lee reports for Reuters. “Samsung last week gave second-quarter earnings guidance that was far weaker than expectations and is on track for its worst quarterly profit in two years, a performance the company attributed in part to price competition and higher inventory levels in China.”
“Research firm Counterpoint’s survey of 35 markets accounting for nearly 90 percent of global sales found that sales for the eight-month-old iPhone 5s stood at 7 million in May, compared with about 5 million for Samsung’s flagship Galaxy S5, which was in just its second full month of sales after a late March release,” Lee reports. “Counterpoint said that the Galaxy S5 appeared to be doing worse than the Galaxy S4 had done in its early launch against the iPhone 5, with each selling about 7 million units a month.”
“The data suggests that Samsung’s problems run deeper than just the inventory buildup in mid-to-low tier devices that the company reported earlier in the month after disclosing weaker-than-expected second quarter guidance,” Lee reports. “Data from research firm Canalys showed that Samsung’s market share in the first quarter of 2014 fell to 18 percent from 20 percent a year earlier, while the likes of China’s Xiaomi and Lenovo Group Ltd made gains.”
“Analysts said Samsung’s new products such as the S5 did not offer enough to entice consumers to pay a premium over cheaper alternatives that were rapidly improving in quality,” Lee reports. “Apple, however, continues to be able to charge premium prices. Its iPhone 6 generation, expected to be launched as soon as September, is anticipated to sport bigger screens which would encroach on what has been a key Samsung advantage.”
Read more in the full article here.
MacDailyNews Take: Smirk. Go get ’em, Karma!
Aye, it’s good to be a tech titan in Cupertino these days matey.
Samdung must have spent that 14 billion in advertising as old cohorts are now suddenly telling the truth.
It is also possible the cohorts are trying to dig themselves out of a lack-of-credibility hole. Loss of credibility will be bad for their kind business in the long run.
7 seems too low. If Apple only sold 21 million 5s models over the last three months then adding in the 5c and 4s there is no way they are near Katy’s high estimate of 39 million (I can’t seem to find consensus). Either this report is way off base and Apple sold something like 8-9 million 5s models a month or Apple is going to miss on the iPhones, unless June was a blockbuster. Am I missing something?
Perhaps the 5c is making up the difference.
Katy Huberty is consistently one of the lowest rated analysts; never look to her for anything that could be construed as factual.
Apple wins by sticking to it’s closely held game plan and ignoring the non-sense yapping tech writers and incompetent analysts. Intelligent tech writers like Jean-Louis Gassée, Ben Bajarin and Horace Dediu are the rare exceptions.
Right now you are down and out
And feeling really crappy, I’ll say.
And when I see how sad you are
It sort of makes me happy, happy!
ahhh, the bane of companies copying apple. building inventories. this will weigh on future earnings as well as these inventories are liquidated. everyone knows apple has decent margins, but few refer to their almost non-existent inventory. most consumers lust for apple products, while most competitors lust for apple’s execution. it doesn’t happen overnight, but takes a journey of consistent decisions (like if you have a vision or a plan). apple’s vision is not to make $. that happens indirectly to their vision of products that please customers. copiers and one-uppers, never seem to have that in their DNA.
Ah! Building inventories that end up unsold. How to cope with that is a mystery. Samsung is just dying to get the new and improved Galaxy L(uxury) model to consumers but the Galaxy channel is already stuffed to the gills. Samsung will certainly sell some Galaxy Ls to the power-hungry who will certainly want a faster processor under the hood, but I’m certain that there are a limited amount of users who need the power and feature set of a Galaxy flagship smartphone.
Somehow I don’t think the solution to unsold inventory is to simply come out with a newer model. Clearing the inventory should take precedence. My guess is Samsung has gotten burned by its own flooding of the smartphone market.
Mdn can you try reading your site on iphone? The ads redirections are annoying to say the least.
I look forward to extensions in iOS Safari that will make ad blocking work as well as it does on the desktop.
New CEO at Samsung, a Mr. Kim Kook will be taking over shortly.
Also other android phones are getting more and more popular, htc Sony etc.
Let’s all speed up samedung’s demise.
Everyone on the site don’t buy their products and tell 1 person you know about how bad samedung is.
Tell 1 person everyday and I’m sure it will reduce the company’s sales and market share more.
“S5 did not offer enough to entice consumers to pay a premium over cheaper alternatives”
Know your audience samsung… People who buy imitations are buying that because it is cheaper than the original. If they were able to pay premium they would buy the original.
This is so funny. For what seems like forever, analysts and pundits have predicted that iOS vs. Android would be a replay of Mac vs. Windows. Now it seems like might be coming true, but in a way that benefits only Apple.
In the PC wars, you had Apple selling premium, high-quality hardware, while the rest of industry sold commodity Windows boxes and fought each other to lower prices in a race to the bottom. But all the commodity hardware ran Windows, allowing Microsoft to rake in billions.
Now you have Apple making the high-quality phones and tablets, while the rest of the market is falling to commodity Android hardware. But Android is free, making a profit for no one, and is fragmented as hell. So, unlike the PC world, where the commodity hardware was unified by one company (Microsoft), who made out like a bandit selling their OS to everyone, the commodity Android hardware is just a pile of cheap fragmented-OS crap.
So what you have is Apple, selling the only phones everyone wants, standing alone atop a pile of commodity crap that isn’t real competition. Samsung is learning the hard way that there isn’t room for two premium manufacturers in such a scenario.
——RM