For the first time, Samsung Electronics Co. shipped more smartphones in the latest quarter than tech industry darling Apple Inc. On the surface, this may look like a big upset in a world that affords the iPhone maker adulation and outsized expectations. The real reason, however, has more to do with timing and Samsung’s variety of offerings and prices.
Apple sold 17.1 million iPhones in the third quarter, 3 million fewer than expected. Samsung, meanwhile, shipped more than 27 million, according to analyst estimates.
So what happened? For one, Apple’s latest iPhone, the 4S, didn’t come out until the quarter ended, so its sales are not included in the figure. People held back on buying older models in anticipation of the new iPhone, which came out Oct. 14. Apple said it sold more than 4 million units in its first weekend on sale, and that should be reflected in the tally for the current, holiday quarter.
Samsung’s quarter was helped by strong sales of its Galaxy phones, though Sideco said the numbers shouldn’t lead to the conclusion that the Samsung Galaxy beat the Apple iPhone.
Besides the Galaxy line, Samsung’s phones include Conquer, Replenish, Focus and Indulge. IHS estimates that Samsung sold about 40 different models during the third quarter. By comparison, Apple had just two — the 4 and the 3GS.
Samsung, which is based in Seoul, South Korea, does not disclose the number of phones it ships. IHS, formerly known as iSuppli, estimates that Samsung shipped 27.3 million smartphones in the latest quarter. Jae Lee from Daiwa Securities puts the figure at about 28 million.
Even as Samsung sold more phones, Apple seems to be making more money on each. That’s one of the reasons Apple is now the most valuable tech company in the world, with a market value about three times that of Samsung.
Apple competes on — and dominates — the high-end smartphone market. By contrast, Samsung has both cheap and expensive phones available. That means Samsung can appeal to a broader range of customers, but the company has to settle for a lower profit margin on lower-end smartphones.