For the first time in years, a smartphone not made by Apple is the best-selling smartphone in the world. For now, at least.
According to Boston-based research firm Strategy Analytics, the Samsung Galaxy S 3 has overtaken Apple’s iPhone 4S as the top dog on the block.
A New Smartphone Leader?
When it comes to smartphone shipments, Samsung and the rest of the Android Empire have controlled an ever-growing slice of the market since the middle of 2011. In early 2012, Samsung overtook Nokia as the No. 1 smartphone maker in the world. Yet no single Samsung device ever outsold a single Apple device, until now.
Samsung is winning the battle of volume with its shotgun approach to smartphone deployment. Every one of its top devices is optimized and shipped towards several carriers and pushed to markets across the world. For instance, you can get a Galaxy S III from five U.S. carriers (Verizon, Sprint, AT&T, T-Mobile, U.S. Cellular) and all of the carriers generously subsidize the device to make it attractive to consumers. Samsung’s approach is the same for the much of the world. Apple has long forsaken T-Mobile and started selling unsubsidized iPhones on pre-paid contracts from the likes of Cricket only in the summer of 2012.
According to Strategy Analytics, the Galaxy S III out-shipped the iPhone in the third quarter by 1.8 million devices, 18 million units to 16.2 million units. The Galaxy S III captured 10.7% of all smartphone shipments versus the iPhone 4S’s 9.7%. But here's the issue, while the iPhone 4S was Apple's flagship phone for much of that period, it transitioned to the iPhone 5 in the middle of the quarter. In addition to the 4S sales, the iPhone 5 sold six million units in Q3 (very impressive for just the 10 days or so it was available during the quarter). That comprisedr 3.6% of the global smartphone marketshare for the quarter.
Correction: The original article stated the Galaxy S 3 outsold the iPhone 4S in by 2.2 million units in Q3 2012. The math was wrong. The article has been updated to the correct sum of 1.8 million units.
Strategy Analytics is a quality research firm that is always quick to point out the quarterly data on smartphone shipments from individual manufacturers. Strategy Analytics is also a research firm that has never met a splashy headline it did not like.
A Transitional Third Quarter
So when we put this particular piece of news in context, it is neither shocking nor surpsising. Consumer demand for the iPhone 4S - released in October 2011 - was lower in Q3 as buyers awaited the iPhone 5, which was announced and released in September. For Samsung, the Galaxy S III was released in June/July this year and Q3 was the first full quarter that it was on sale.
Strategy Analytics is talking only about Q3 shipments, not all-time shipments of the iPhone 4S versus the Galaxy S III. If we are talking about total Q3 shipments of smartphones between the two companies (taking into account all iPhone and Samsung models), Samsung shipped 30 million (56.9 million vs. 26.9 million) more devices than Apple did.
So a confluence of factors led to Galaxy S III topping the iPhone 4S in Q3:
- Timing: Old device (iPhone 4S) vs. new device (Galaxy S 3)
- Timing: Consumers await iPhone 5
- Timing: iPhone 4S superseded by iPhone 5 at the end of the quarter
- Distribution: Samsung’s spray and pray strategy of global distribution
The fourth quarter will tell a more important tale. The holiday shopping season will be the first full quarter the iPhone 5 is on the market. Combined with lower price points for the iPhone 4S and iPhone 4, that may help Apple close the gap with Samsung, albeit temporarily. Apple’s biggest quarter of all time came at the end of 2011, when it shipped 37 million iPhones and pulled in $46.3 billion in revenue. Expect Apple to top that this year, while Samsung continues to churn out huge volumes of smartphones as well.