Samsung pulls ahead of Apple in phone sales

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samsung ladiesSouth Korean electronics giant Samsung has, for the first time, overtaken Apple as the world’s most profitable mobile phone maker. According to research firm Strategy Analytics, Apple made an estimated $3.2 billion profit from iPhone sales in the second quarter 2013. That is significantly down from $4.6 billion in the same quarter in 2012. Samsung, however, raked in an estimated $5.6 billion from all phone sales in the same period.

Samsung continued to dominate in total mobile phone shipments worldwide, with 107 million phones (smartphones as well as basic models) shipped in the second quarter 2013. Apple, which does not sell basic model mobile phones, shipped 31.2 million iPhones and came in third place behind Nokia in total phone shipments.

But the picture is not much prettier for Apple when looking only at smartphone sales. Apple’s share of smartphones shipped worldwide decreased to 13.6 per cent from 16.6 per cent in the second quarter of 2012. In total, Apple posted its second-lowest yearly growth rate in iPhone sales in almost four years, according to the International Data Center (IDC), which may be due to many buyers holding off purchasing new iPhones in anticipation of the next generation release this fall.

The key to Samsung’s success has been China. Samsung accounts for 19 percent of the $80 billion smartphone market in China, and that market is expected to surge to $117 billion by 2017, according to IDC. Apple only accounts for 9 per cent of the Chinese smartphone market, and its revenue in China plummeted 43 per cent from the first quarter – an incredible and unprecedented decline.

One important reason for Samsung’s dominance in China is its successful adaptation to the culture. Though it is a South Korean firm, Samsung has long focused on localising products sold in China for the domestic Chinese market, while Apple only offers a ‘one size fits all’ model. For instance, Apple’s iPhone operating system offers links to popular Chinese websites like Weibo, a social network, but customers have to download them from the App Store. Samsung, on the other hand, sells its Chinese smartphones with these applications pre-programmed, along with a host of other features that uniquely appeal to Chinese consumers.

Another reason for Samsung’s success in China is the sheer variety of products. While Apple offers one generation of iPhone after the next, sometimes with years between generations, Samsung releases multiple models every year with a range of features and prices.

With this latest round of bad news, Apple may be changing its approach. It has typically relied on its reputation as the top-of-the-line smartphone provider to charge high prices and thereby make up for lost volume. But in the current worldwide economic slowdown, this business model may be faltering. Apple CEO Tim Cook is rumored to be planning the release of a new budget iPhone, stripped down to the bare essentials, for release later this year.

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Reading Time: 2 minutes

South Korean electronics giant Samsung has, for the first time, overtaken Apple as the world’s most profitable mobile phone maker. According to research firm Strategy Analytics, Apple made an estimated $3.2 billion profit from iPhone sales in the second quarter 2013. That is significantly down from $4.6 billion in the same quarter in 2012. Samsung, however, raked in an estimated $5.6 billion from all phone sales in the same period.

Reading Time: 2 minutes

samsung ladiesSouth Korean electronics giant Samsung has, for the first time, overtaken Apple as the world’s most profitable mobile phone maker. According to research firm Strategy Analytics, Apple made an estimated $3.2 billion profit from iPhone sales in the second quarter 2013. That is significantly down from $4.6 billion in the same quarter in 2012. Samsung, however, raked in an estimated $5.6 billion from all phone sales in the same period.

Samsung continued to dominate in total mobile phone shipments worldwide, with 107 million phones (smartphones as well as basic models) shipped in the second quarter 2013. Apple, which does not sell basic model mobile phones, shipped 31.2 million iPhones and came in third place behind Nokia in total phone shipments.

But the picture is not much prettier for Apple when looking only at smartphone sales. Apple’s share of smartphones shipped worldwide decreased to 13.6 per cent from 16.6 per cent in the second quarter of 2012. In total, Apple posted its second-lowest yearly growth rate in iPhone sales in almost four years, according to the International Data Center (IDC), which may be due to many buyers holding off purchasing new iPhones in anticipation of the next generation release this fall.

The key to Samsung’s success has been China. Samsung accounts for 19 percent of the $80 billion smartphone market in China, and that market is expected to surge to $117 billion by 2017, according to IDC. Apple only accounts for 9 per cent of the Chinese smartphone market, and its revenue in China plummeted 43 per cent from the first quarter – an incredible and unprecedented decline.

One important reason for Samsung’s dominance in China is its successful adaptation to the culture. Though it is a South Korean firm, Samsung has long focused on localising products sold in China for the domestic Chinese market, while Apple only offers a ‘one size fits all’ model. For instance, Apple’s iPhone operating system offers links to popular Chinese websites like Weibo, a social network, but customers have to download them from the App Store. Samsung, on the other hand, sells its Chinese smartphones with these applications pre-programmed, along with a host of other features that uniquely appeal to Chinese consumers.

Another reason for Samsung’s success in China is the sheer variety of products. While Apple offers one generation of iPhone after the next, sometimes with years between generations, Samsung releases multiple models every year with a range of features and prices.

With this latest round of bad news, Apple may be changing its approach. It has typically relied on its reputation as the top-of-the-line smartphone provider to charge high prices and thereby make up for lost volume. But in the current worldwide economic slowdown, this business model may be faltering. Apple CEO Tim Cook is rumored to be planning the release of a new budget iPhone, stripped down to the bare essentials, for release later this year.

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