Recently, two trends have marked the global smartphone industry. Sales increases have slowed, and Samsung Electronics Co. has moved into an incredibly dominant place. The South Korean company has become the firm to chase, and it is unlikely to give up its prized position easily.
Just as Samsung announced record profits of $5.9 billion for the most recent quarter, research firm Strategy Analytics released second-quarter figures for global smartphone sales. The pace of sales dropped to 32% and total units shipped worldwide were 146 million. The improvement in unit sales was the worst in three years.
The increase in sales was extraordinary for one company, however. “Samsung shipped 51 million smartphones worldwide in Q2 2012” the report showed. Samsung’s share of the global market — 35% — was twice Apple’s (NASDAQ: AAPL)share. This is another signal, aside from earnings, that the perceived leader in the industry has lost its head of steam.
The study shows what analysts have believed for some time: the smartphone industry is a two-horse race. Vendors such as Nokia Corp. (NYSE: NOK), LG Corp., Motorola Mobility Inc. and HTC Corp. may as well step aside. Their sales are modest enough that they may never make money on their smartphone businesses.
What was entirely unexpected was that Samsung’s Google (NASDAQ: GOOG) Android OS-based phones could do so well. Apple has been accused of launching its iPhone 5 too late. And many analysts believe that the iPhone 4S’s lack of 4G compatibility cost the company precious months. Samsung’s Galaxy S III, which does work on 4G networks, has been an unqualified success.
Apple, for the time being, has had its market share improvement efforts largely relegated to the legal system, where it has tried to block sales of Samsung products over patent violations. That is a flawed and risky plan. Apple would have been better off to have gotten a superior product to market.
From Strategic Analytics:
Global Smartphone Vendor Shipments and Market Share in Q2 2012
| Global Smartphone Vendor Shipments (Millions of Units) |
Q2 ’11 |
Q2 ’12 |
| Samsung |
20.2 |
50.5 |
| Apple |
20.3 |
26.0 |
| Nokia |
16.7 |
10.2 |
| Others |
53.3 |
59.4 |
| Total |
110.5 |
146.1 |
| Global Smartphone Vendor Marketshare % |
Q2 ’11 |
Q2 ’12 |
| Samsung |
18.3% |
34.6% |
| Apple |
18.4% |
17.8% |
| Nokia |
15.1% |
7.0% |
| Others |
48.2% |
40.7% |
| Total |
100.0% |
100.0% |
| Total Growth Year-over-Year % |
77.1% |
32.2% |
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks