The Samsung juggernaut widens its lead over Apple


If there were any doubts about Samsung maintaining its world’s-top-phone-manufacturer status for the short to medium-term future, they should be dispelled as of now. The Korean company’s results for the fourth quarter of 2012 show profits up a whopping 76 percent since Q4 2011, reaching 7.04 trillion won ($6.55 billion).

Much of that is down to Samsung’s two Android flagships, the Galaxy S III and Note II. Samsung’s Mobile Communications division brought in revenues of 27.23 trillion won ($25.35 billion) during the quarter, which represents just under half of the overall company’s revenues in that period – remember that Samsung also makes everything from semiconductors to refrigerators.

Smartphone supremacy

“Samsung led gains with its full lineup of entry- to mid-level smartphones, expanded sales of tablet PCs and an increase in average selling price (ASP) from the previous quarter,” the firm said in its results statement. “The success was mainly brought on by strong sales of Galaxy S III and Galaxy Note II, which beat the popularity of their predecessors with record sales in record time.”

Samsung doesn’t break out actual mobile phone shipment volumes in its financial reports, but analyst house IDC estimates shipments of 63.7 million smartphones during the quarter. That’s up against Apple(s aapl)’s 47.8 million iPhone shipments during the same period. During the fourth quarter of 2011, Apple sold 37 million smartphones and Samsung sold 36.2 million. At the time the two companies were battling it out for the top spot, as Samsung had been ahead in the previous quarter, while people were waiting for the iPhone 4S.

Those days are over: the fourth quarter is what really counts, due to iPhone launch timing and the holiday season, and Samsung is now clearly way ahead of its U.S. rival in terms of shipments, with 29 percent market share to Apple’s 21.8 percent. There’s a big drop to the third-place company’s share – Huawei can boast 4.9 percent of the smartphone market right now, at least in terms of shipments. (Sony(s sne)’s next, followed by ZTE, and Nokia(s nok) is now jumbled into the “others” category.)

Obviously Apple is more profitable, having made $13.3 billion in profits during the quarter, which is roughly twice as much as Samsung did across its whole business. That said, Samsung’s average smartphone selling price is rising, as its big hitters are premium devices.

PC decline

Other elements of Samsung’s results also provide useful indicators for various tech sectors. One relates to the company’s DRAM business. It should come as no surprise that Samsung sees “weak” demand for its PC DRAM – the desktop PC business as a whole is in inexorable decline as the world goes mobile, and we saw further evidence just days ago when Intel(s intc) pulled out of the motherboard business. Samsung’s mobile DRAM business is steady, and the company expects that and its server DRAM line will do well this year.

In a similar vein, Samsung’s notebook and monitor display panel business is also feeling the pain, while OLED panels for smartphones are keeping profits up.

And where’s the biggest growth in mobile? Emerging markets, of course – in fact, Samsung expects demand for smartphones in developed countries to “decelerate” during the first quarter of 2013, while more affordable smartphones and “a bigger appetite for tablet PCs” stimulate demand in emerging markets through the whole year.

With a company that has as diverse a portfolio as Samsung’s, results such as these really do provide a wide-angle snapshot of the times we live in. And, tech landscape aside, that also includes uncertainty: Samsung said it’s probably keeping capital expenditure steady for 2013 rather than increasing investment, but it will “respond to the market’s ebb and flow with a capex plan that is flexible in manner”.


The Man In San Diego

I find it astounding that so many Apple apologists react to Samsung’s surge with the dogmatic “don’t confuse me with facts” zeal of religious millennialists who, while disappointed after waiting for Christ’s return on some date certain, simply went back to their drawing boards and revised the date of His arrival, rather than contemplate that the dogma itself might be questionable, not just the calculations.

For me, the sheer emotional tone of their rebuttals makes their arguments less credible. I don’t see anyone on Samsung’s side proselytizing with such religious fervor. Which tends to lend it an air of reasonableness in comparison.

The international sources of components aside, my natural inclination is to cheer on the American company success rather than it’s Korean competitor. And I do this while happily dictating my words to my Samsung Galaxy’s near perfect voice recognition. And I proof read my composition on my relatively large, brightly lit, screen. And should I wear down the battery, I can simply charge it with anyone’s borrowed micro USB cable, or just swap out the battery. Neither option is available to iPhone users. Indeed, the iPhone 5 can’t even be charged by an iPhone 4’s cable, nor can they be docked on any of the numerous iPhone docking devices which are now obsolete.

Apple seems to react to it’s own success by making yesterday’s Apple marvel obsolete. This is the same mistake they’ve always made. I bought a Mac G3 desktop once and was surprised that the G4’s monitor was incompatible with it.

Amazingly, despite these errors, Apple seems to rise from it’s own ashes like a phoenix time and time again. So I wouldn’t write them out so hastily.But just like all of it’s past resurrections it will have been on the shoulders of a new product, not the redemption of their product line.So to those defending iPhone with such religious zeal, I would advise them to pray for their current device’s future lest Apple again make them obsolete with their next model’s introduction.


I will explain what this article say, Smartphone MARKET SHARE.
Samsung have increase Smartphone Market share over apple period.

-shipped vs sold
-high end vs cheap model
-web analytics
-looking at what people use
These above queries are not relevant to this article. Save it for another article that talks about your queries above.

It feels good to give an un-bias view regardless whether it is pro apple or pro android.

Enough said.

Inn Ovation

What does the title of this post actually refer to? According to the author it seems handsets in hand, while this may be true (if you take shipped numbers as the metric), but can you actually compare the loads of cheap Samsung smartphones to the smartphones produced by Apple?

The question not addressed is what the meaning of that lead is. According to the author (as we can glean from his comments), more handsets on the streets raises the profile of Samsung. In other words, quantity would rule over quality?

I seriously question that. As others have pointed out, it isn’t so simple to build a meaningful brand and Samsung seems to be a long way from having the same kind of brand recognition and valuation as Apple has. So its hard to speculate on what it actually means in the long run.

Only time will tell but it is very well possible that there is more than enough room for both a volume manufacturer acting as a ‘fast follower’ and a high end manufacturer focussing on quality rather than quantity and innovation. Its a strategy that seems to work well for Apple despite of what the investor mood of day is.

So yes, if you look at the pure number of handsets in the market, you could argue Samsung is in the lead. However, that doesn’t necessarily mean its bad news for Apple that Samsung sells more in terms of (cheap) handset numbers, even in the long run.


The ability for Apple fans to willingly stick their heads in sand, all the while talking out of context about things that were very clearly explained in the article, is really telling. No one insulted your precious Apple, calm down, be happy and enjoy your phone. It is okay for other companies to get attention once in a while.


Samsung is going to have to maintain its momentum and there’s no guarantee it can. It’s not an easy thing to hold loyal consumers. OK, Samsung has had a good year in smartphone sales, but it doesn’t make the company infallible either. Every year analysts draw some conclusions about long-term sales momentum, but it doesn’t always pan out that way. I can’t tell if Apple is dying or not because each quarter is a battle and each quarter can bring out unforeseen changes in products. Maybe Wall Street likes to predict future trends but I see more clearly in the present.

Apple is still making decent money and just because the hedge funds don’t care about fundamentals, I still think they’re important because I want a long-term investment to stick with. I’m not jumping from one currently hot company to the next in search of quick wealth. It’s unfortunate that Apple stock had a meltdown, but hedge fund trading causes that stuff to happen rather easily.


WOW, Alot of i-sheep on this article who can’t read the article probably.

i-sheep catchcry
-shipped not sold
-thousands of Samsung “cheap phone”
-profit, profit

The article is talking about the importance of MARKETSHARE. Stop trolling i-sheep.


Please tell us why exactly marketshare is important? Please, we’re all ears.

The answer of course is that unit sales marketshare is a means to an end, but Android is not delivering the benefits to developers, manufacturers, advertisers, content providers, e-commerce vendors, consumers or Google that such high marketshare should be delivering.

Instead it is Apple’s iOS that completely dominates Android with 80% manufacturer profitshare (Morgan Keegan), 88% mobile e-commerce share (IBM), 91% tablet web browser share (Strategy Analytics), 6x the developer revenue (Distimo), 4x the number of developers (AppStore HQ), 97% business tablet activations (Good Technology), 74% business smartphone activations (Good), 67% of all in-app and web advertising revenue according to Opera, etc etc.

Samung’s and Android’s high marketshare numbers are no different and just as meaningless as when Nokia and Symbian had 60-70% smartphone marketshare in 2007.


Only 50% (27 million) of Samsung’s smartphones shipped in Q3 2012 were Galaxy smartphones with only 18 million or 33% of them S III’s.

This shows that Apple continues to dominate Samsung in high-end smartphone sales which is where Apple competes, not in cheap and nasty featurephone replacements which appear to be the bulk if Android sales around the world considering Android’s terribly low usage share figures.

The Gnome

Fortunately most of us go for quality when we buy a phone… not cheap plastic quantity.

Samesung selling a crapload of cheap phones is soooo impressive, man it must mean they are the best! Yea, thats dumb.


Why do you use ESTIMATED Samsung “Ship” numbers then take Apple’s ACTUAL “sales” numbers and relabel them “ship” numbers as if the comparison is the same?

Anyone else find it interesting that AT&T announced they sold 10 million smartphones last qtr with 8.1 million of them Apple iPhone? The other 1.9 million was everyone else. Humm…

Why wouldn’t Samsung stick it to Apple the day after Apple’s announcement and give actual SALES numbers? Humm…Why is the iOS killing Android on web analytics? Humm…

Carry on!

David Beckemeyer

What an incredible low for gigaom. Linkbait at its finest. Apple reports record profits, large increases in market share, dominating ALL other phones in the U.S. (including Samsung). To say nothing of the yet untapped upside in tablets. Yeah, time to put them on the Deathwatch.


Once again Apple is doomed. They just reported one of the most profitable quarters in the history of the planet. How can they sustain this. It must be a peak and that means the trend is DOWN.

More eyeballs on stories that predict failure for Apple.
Nothing to see here move on.


Moreover what matters more? how many units shipped or profits? I bet you Samsung would rather have apple’s profits than having shipped more phones. Again shipped, not sold.

If Samsung was selling all those phones it claims to have shipped, its profits should be way way higher….

Again dig deeper and examine the specifics


And samsung ships a bazillion different phones, many of which are available for no money down. Noticed I said shipped. Samsung never reports sales. Apple does. Again you are comparing apples with oranges and greatly oversimplifying things.


Samsung would reasonably be ahead in smartphone devices sold – they make a million and one models in low, mid, and top end categories. Apple has one flagship smartphone, and it’s a top end model, which typically sell as well as cheaper models.

The Fact that Apple is still sitting where it’s at is remarkable, but apparently so called factual journalists lump everything together to prove their own point rather than examine the specific numbers.

David Meyer

I would actually dispute that analysis. Apple continues to sell older versions of the iPhone and cuts their pricing as newer models emerge. That makes those older models a rough equivalent to Samsung’s S III Mini and that kind of phone. Not exactly the same thing, I’ll grant you, but Apple certainly sells more than one phone.


Can you explain your analysis when BOTH Verizon and AT&T reported that the majority of the their smart phone sales where iPhone? Can you explain why iOS leads Android by ever web/internet analytics measure? I mean by your numbers Android should be killing iOS. Can you explain why, since this past week, I have made it a mission to look around at what people are using and I find a vast majority on iPhone?


you guys did not read the full article, he says apple is more profitable.

Rob Blind

What you are seeing here is a top for Apple or a change in momentum. Yes they are more profitable than Samsung but why? Is it because they are spent so little on R&D to make a better phone? Samsung has been pushing the envelope with the Note while Apple’s Iphone 5 is a minor upgrade in hardware from the 4s and little if no improvement in the UI.
To my perspective Apple has been coasting on the success of iphone and has coasted for too long. MS did the same thing with IE6 which was the standard on the Internet prior to Firefox. MS did nothing with it (how long was it before we had IE7? which was a dog)and Firefox soon ate their lunch.
Can Apple fix it? It looks like they are trying. They canned Forstall and moved Ives in. Hopefully will see a battle royale where consumers get kick ___ phones

saidimu apale

Apple’s seems to be a classic case of the Innovator’s Dilemna ('s_Dilemma):

> successful companies can put too much emphasis on customers’ current needs, and fail
> to adopt new technology or business models that will meet customers’ unstated or future
> needs

It seems consumers want bigger phones, smaller tablets, higher-density displays (and possibly a stylus?) and all that at a lower price point. Apple only grudgingly, and marginally, increased the the iPhone 5 screen size and even more grudgingly released the iPad Mini.

Samsung did all of the above and that is part of the reason they have the wind behind their backs.


Samsung did because they have to try every trucks to look for success and not because they know what consumers want.
If they knew they would have make just one products and not 37 iterations at different price point.
Your theory of profits is BS and name me one company that keeps on losing money and yet deemed successful and able to stay in business.

One more thing for a company to survive they have to be continuously profitable.

But then your theory suits one company Amazon which makes less yet deem to be better than more profitable companies.


Seriously giga on? Have you actually looked at the actual metics and numbers. First off in the one true metric that matters apple blew Samsung out of the water: profits. Plus samsungs profits derive from all of its business lines not just its electronics business. You are mostly comparing apples with Oranges. Pun intended. If you looked at just its electronics business vs apple the outlook is even more dismal

Secondly Samsung only reports shipped numbers. That’s not the same as actual sales.

Instead of following the herd mentality dig a little deeper. See for example:

David Meyer

I was clear in the piece that Apple is more profitable. This article is about phones in hands. It would be a mistake to *only* focus on units – think back to when Nokia was still technically a leader but clearly on the way down – but it’s not a metric you can ignore. Ultimately, it will be a case of ‘which brand do you most see on the street’, and that is hugely important.

saidimu apale

Very true.

People tend to forget that a giant on its way down is still a giant by virtue of its sheer size.

Profits, while hugely important, are an indicator of the immediate past success and not necessarily an indicator of future momentum.




Comparing unit sales of smartphones between Apple and Samsung is like comparing apples to oranges. 2/3rds of Samsung’s smartphone sales are low end devices with an ASP of ~$300. Only about 20 million of Samsung’s Christmas quarter smartphone sales were high end devices like the Galaxy SIII and Galaxy Note. So, apples to apples, Apple blew Samsung away, selling 2.5x as many high end (read: profitable) phones.

The bulk of Samsung’s unit sales are very vulnerable to poaching by Chinese name brands and no name OEM’s. Aall these low end phones run Gingerbread Android, so they are effectively interchangeable. There is no customer stickiness because the consumer cost to switch is zero. Apple is much less vulnerable to attack from the low end of the market becuase it has a very loyal customer base, plus a unique and highly sticky software ecosystem.

Hollywood Goy

I believe the numbers are, indeed, based upon Samsung Electronics results, not the much larger Samsung Group, so it is a little more Apples to apples than you suggest.

Market share is also as important as profits in many cases, as it can indicate future strength in the marketplace. Apple has built an incredible high margin business in the CE space, but their growth trajectory is in question, as evidenced by the recent stock trend.

Nonetheless, it’s great for consumers to have two strong competitors going at it!



Ask Samsung if they would be happier selling more phones than Apple, or if they would be happier selling less phones than Apple but have Apple’s 80% of the profits of worldwide mobile phone sales.

Hmmm, I wonder what their answer would be? ;-)

Ross Anderson

Sounds good until people begin to realise that they are being ripped off by being overcharged for an inferior product

paul martin

I wonder if there will be a climate related slow-down. All the phone shops are empty of customers, those that are there are trying to sort identity theft scams.

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