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fermat-au

macrumors 6502
Dec 7, 2009
464
521
Australia
Interestingly the the top vendor is "Other". I regard this as a positive, no single corporation controls the market, this is good for innovation. That said, I would have liked to see more manufactures listed rather than be included in "other".
 

arbitter

macrumors regular
Nov 12, 2010
109
1
Belgium
Well it's been ages I've seen an LG phone actually owned by someone, and milennia since I've heard someone speak good about LG phones, so it was about time I guess.
 

twilson

macrumors 6502
Apr 11, 2005
382
16
I find it interest that the tables are caption "Worldwide Mobile Phone Sales", yet the columns are headed "shipments", not even close to the same thing (except in Apple's case).
 

Leaping Tortois

macrumors regular
Oct 11, 2010
151
0
Melbourne, Australia
Don't forget that "shipments" and "units sold" are not the same. Which puts Apple even higher, as we know they sold literally every iPhone they could make last quarter, but its highly doubtful this was the case with any other manufacturer.

I find it interest that the tables are caption "Worldwide Mobile Phone Sales", yet the columns are headed "shipments", not even close to the same thing (except in Apple's case).

This argument is so incredibly annoying. In the case of Samsung and let's say the Galaxy S2, You don't ship the millions of units they have unless they were selling, and they are. In some cases you may find that units shipped are greater than units sold, but that would be rare. You'd generally see only a few shipments over a very short period of time.

So enough of this "Units shipped isn't units sold" crap. How about accepting the idea that others other than apple are able to do well?
 

gnasher729

Suspended
Nov 25, 2005
17,980
5,565
This argument is so incredibly annoying. In the case of Samsung and let's say the Galaxy S2, You don't ship the millions of units they have unless they were selling, and they are. In some cases you may find that units shipped are greater than units sold, but that would be rare. You'd generally see only a few shipments over a very short period of time.

So enough of this "Units shipped isn't units sold" crap. How about accepting the idea that others other than apple are able to do well?

In the case of tablets, there were apparently two manufacturers who shipped a million tablets, and sold only low hundred thousands. So it does happen. Happened to Nokia as well when their sales dropped (one quarter with shipments as normal but sales much less than shipments, followed by a quarter with massively dropped shipments, but sales more than shipments). But you are right to say that if a company didn't report some very bad news this quarter, then last quarters shipments and sales were about the same, and if they don't report some very bad news in the next quarter, then this quarters shipments and sales are about the same.
 

rickdollar

macrumors 6502
Mar 12, 2007
472
24
So enough of this "Units shipped isn't units sold" crap. How about accepting the idea that others other than apple are able to do well?
It has nothing to do with accepting a company is able to do well. They're not the same measurement. Retailers return product to manufacturers all the time. That doesn't mean that units shipped can't equal units sold. It's just that shipped is a little less clear than sold.
 

gnasher729

Suspended
Nov 25, 2005
17,980
5,565
It has nothing to do with accepting a company is able to do well. They're not the same measurement. Retailers return product to manufacturers all the time. That doesn't mean that units shipped can't equal units sold. It's just that shipped is a little less clear than sold.

I think items returned by the dealer would be subtracted from "shipped", just as items returned by the customer would be subtracted from "sold" (which is why it is possible that the number of items shipped or sold can be negative).

What if a "Best Buy" warehouse with 100,000 iPads inside burns down? In that case #shipped would be 100,000 more than #sold, but quite legitimately, and as far as Apple profits are concerned, it would be correct. As far as Apple market share is concerned, it would be incorrect.
 

kdarling

macrumors P6
It has nothing to do with accepting a company is able to do well. They're not the same measurement. Retailers return product to manufacturers all the time. That doesn't mean that units shipped can't equal units sold. It's just that shipped is a little less clear than sold.

Contrary to popular myth, Apple does much of the same handwaving.

Except for direct sales to end users through Apple's brick stores, Apple also only reports sales into the distribution channel (e.g. retailers). The moment they ship out devices to a distributor like Best Buy, Apple chalks them up as a sale.

Sometimes MacRumors takes the time to point that out in order to avoid the repeating of the sales-v-shipping myth, sometimes not. The last time they did was when Samsung first shipped more smartphones than Apple:

"Several observers have also noted that Samsung's number refers to shipments while Apple's refers to sales, although those metrics may not be vastly different. Apple's "sales" numbers actually refer to sales into the distribution channel rather than end users, - MacRumors - Oct 2011"

Ignoring the blogger echo chamber, there are some good reference articles on the net, such as:

So why is it okay that companies report units shipped as units sold? It all comes down to accounting.

Companies need to determine inventory and cost of good sold figures in order to calculate earnings. Sounds simple enough. Diving deeper into purchasing contracts would show the more intricate interactions between a buyer and seller. Without jumping into the accounting bunny hole, let’s look at Apple’s most recent 10-K:

“(Apple) recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collection is probable. Product is considered delivered to the customer once it has been shipped and title and risk of loss have been transferred. For most of (Apple)’s product sales, these criteria are met at the time the product is shipped. For online sales to individuals, for some sales to education customers in the U.S., and for certain other sales, (Apple) defers revenue until the customer receives the product because (Apple) legally retains a portion of the risk of loss on these sales during transit.”

An iPad on a freight plane headed to a Walmart warehouse is no longer counted as an iPad in Apple’s inventory, instead it is counted as an iPad in Walmart’s inventory. Apple is able to recognize that iPad as sold and recognize the accompanying revenue (and profit).

- Business Insider, Mar 2011

Note that in most cases, the "customer" is the retailer. Sometimes it can be an educational institution. Sometimes it actually is an individual.

I think items returned by the dealer would be subtracted from "shipped", just as items returned by the customer would be subtracted from "sold" (which is why it is possible that the number of items shipped or sold can be negative).

Apple specifically states in their SEC filings that they count all shipments as sales, and that if any are returned unsold later, Apple accounts for that lost revenue separately.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
Apple specifically states in their SEC filings that they count all shipments as sales, and that if any are returned unsold later, Apple accounts for that lost revenue separately.

Out of curiosity - and really nothing more - I wonder what effect the genius bar has on products sold. Meaning (for example) Some people on here go through 3-4 phones at launch because the screen temp isn't right, there's a dead pixel, whatever. Does Apple count those as 3-4 phones "sold" or is it still 1.

Further - if the phones exchanged are then sold as refurbished - are those additional sales?

Not trying to poke holes in Apple's #s. Genuinely curious (if you know)
 

kdarling

macrumors P6
Out of curiosity - and really nothing more - I wonder what effect the genius bar has on products sold. Meaning (for example) Some people on here go through 3-4 phones at launch because the screen temp isn't right, there's a dead pixel, whatever. Does Apple count those as 3-4 phones "sold" or is it still 1.

We do know that shipments to Apple stores are not counted as sales until an end user pays for it, but I don't know about replacements. I don't think it would count as a sale if it's exchanged for free.

However, replacements would certainly register as extra carrier activations.

Further - if the phones exchanged are then sold as refurbished - are those additional sales?

Are Apple refurbished sales counted in with all the other sales? Good question. I would certainly think they do, since there is associated revenue from a new customer. (And there were two devices involved, a new one to the original customer and the original one to the new customer.)
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
We do know that shipments to Apple stores are not counted as sales until an end user pays for it, but I don't know about replacements. I don't think it would count as a sale if it's exchanged for free.

However, replacements would certainly register as extra carrier activations.



Are Apple refurbished sales counted in with all the other sales? Good question. I would certainly think they do, since there is associated revenue from a new customer. (And there were two devices involved, a new one to the original customer and the original one to the new customer.)

So it's possible that one phone is counted more than once in both sales and activations. I'm not saying that's what happens. I'm saying it's POSSIBLE.
 

DeathChill

macrumors 68000
Jul 15, 2005
1,663
90
Correct me if I'm wrong but doesn't Apple report products in the distribution channel so you can compare the number from the last quarter to the number from the current number to determine exact sold numbers?
 

theOtherGeoff

macrumors regular
Jun 18, 2010
189
0
Well it's been ages I've seen an LG phone actually owned by someone, and milennia since I've heard someone speak good about LG phones, so it was about time I guess.

I've owned (well my kids used) LG phones in the past. I was a Sanyo guy at the time... LG phones were absolutely the cheapest phones I had ever seen. Even Nokia candy bar phones seemed better (I had those too, to replace the Sanyo's).

Looking at this, this is paralleling the PC marketplace. Apple (sans tablets) is Number 3, behind HP and Dell, and the rest are an order or magnitude lower in sales. Apple defines the highly mobile laptop now, the current market darling. And when you toss in the iPad, it absolutely captures the 'personal' computing [read: checking Facebook, email, twitter, and running a few applications, plinking out notes, and tracking expenses], It has cornered the 'demand' market. Apple is defining computing for the masses. Just like windows defined computing in the 90's (away from mainframes, hobbyist [read: android/linux], and yes, apple ][ and mac systems).

Being 3rd in all phone sales is significant, but not that important. The important thing is that Apple DEFINES a market, with essentially 1 entry (I'll let the 4s vs 4 vs 3GS argument slide), and isn't 'racing to the bottom' trying to cater to 1000's of micro whims at the top and bottom of the market.

What is the same here... Apple has focused on end to end experience... from UI to manufacturing to marketing to retail to internet experience and operational up port to 'media consumption.' What other vendor is in that space.

If Apple stays in 3rd place in 'phone' for the foreseeable future... I think they'll be quite happy, Given that they get a piece of 3 significant revenue streams (HW, SW, 'media') and have a cross-immersive solution in both the 'home' and 'mobile' consumer mindspace. They are best positioned for long term economic growth.
 

mknopp

macrumors member
Jan 27, 2010
31
0
As others have stated, total sales percentage isn't that big of a deal. Profit is the big deal.

That being said, I was interested in a little thought experiment.

Suppose that Apple, Samsung, and Nokia were to maintain their year-to-year change (unlikely but this is a thought experiment so just accept it for now), how long would it be before Samsung overtakes Nokia? How long until Apple overtakes Samsung?

The results were exceptionally surprising to me how quickly it was.

Samsung would take the #1 spot in 2012 from Nokia.
Apple would take the #2 spot from Nokia in 2013.
And most surprising, Apple would take the #1 spot from Samsung in 2014.

I was shocked to see that the placements would change so quickly. Not that it is real, as we all know that these companies won't maintain the same percentages of change for the next three years. But I thought it was interesting enough to share.
 

kdarling

macrumors P6
So it's possible that one phone is counted more than once in both sales and activations. I'm not saying that's what happens. I'm saying it's POSSIBLE.

-- Activations, definitely.

We know a single phone is counted each time a new person activates it. In addition, each replacement will count as a new activation.

Thus activation counts are inflated up to 20% by previously used phones being reactivated on another line, plus another 3-5% or more for returns and multiple returns where a single customer activates each replacement.

The high resale and hand-down rate of iPhones have boosted AT&T activation numbers for several years now, sometimes by millions.

-- As for sales, I think those are in sync.

It would seem fair that a warranty replacement that is refurbished and sold should also count as a sale, since there were actually two devices involved.

If a retailer sells a phone, then it's returned, then they sell it again, that's still only one sale because Apple counted it only once when they shipped to the retailer.

If an Apple store sells a phone, then it's returned and not replaced with another, then hopefully the store reduces its sold count and all is also well.

Any situation we're missing?
 

gnasher729

Suspended
Nov 25, 2005
17,980
5,565
Correct me if I'm wrong but doesn't Apple report products in the distribution channel so you can compare the number from the last quarter to the number from the current number to determine exact sold numbers?

Yes, they do. If the number in the channel is too low, that indicates they had problems producing enough. If the number is a bit high, that indicates the company has lots of money in the channel (for example six weeks worth of iPhone sales would be an awful lot of money) and isn't managing inventory perfectly. If the number is very high, it means trouble because the goods are not selling.

Any situation we're missing?

Goods stolen from the store?
 

DeathChill

macrumors 68000
Jul 15, 2005
1,663
90
-- Activations, definitely.

We know a single phone is counted each time a new person activates it. In addition, each replacement will count as a new activation.

Thus activation counts are inflated up to 20% by previously used phones being reactivated on another line, plus another 3-5% or more for returns and multiple returns where a single customer activates each replacement.

The high resale and hand-down rate of iPhones have boosted AT&T activation numbers for several years now, sometimes by millions.

-- As for sales, I think those are in sync.

It would seem fair that a warranty replacement that is refurbished and sold should also count as a sale, since there were actually two devices involved.

If a retailer sells a phone, then it's returned, then they sell it again, that's still only one sale because Apple counted it only once when they shipped to the retailer.

If an Apple store sells a phone, then it's returned and not replaced with another, then hopefully the store reduces its sold count and all is also well.

Any situation we're missing?

Just curious about where you're getting your numbers? I didn't think AT&T ever stated the numbers for used iPhone activations.

EDIT: Also mighty impressive for Apple is that apparently 70% of all smartphone activations on Verizon and AT&T were iPhones. Very impressive, I think.

Combined with the fact that in the holiday quarter Android apparently managed 60 million activations and iOS did 62 million. It's hard to believe a single vendor beat out an entire army of OEM's, each with a portfolio of smartphones and tablets.
 
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kdarling

macrumors P6
Correct me if I'm wrong but doesn't Apple report products in the distribution channel so you can compare the number from the last quarter to the number from the current number to determine exact sold numbers?

Not the distribution channel. A product in the distribution channel is on its way from Apple to its channel partners, who are resellers and retailers other than its own stores. Those shipments are the sales numbers that Apple reports.

I believe you mean the inventory channel, which consists of how much product a company has ready to sell into the distribution channel upon demand. Apple started reporting that number not long after the first time that they could not meet demand, in order to sooth investors.

These days it is considered smart for an electronics supplier to have a little over a month's worth of inventory ready to sell and ship. If they're about to launch in new countries, it's important to boost that number a bit.

As Gnasher729 indicated, when companies do not have the right amount in their inventory channel, investors get nervous. Too much == waste of manufacturing money, too little inventory == customers (stores) could go somewhere else.

--

If inventory does get low during a quarter when Apple wants some sales publicity, they'll starve their own stores and ship to the retail distribution channel instead. E.g:

"They suggested the inventory shortfall was more likely the result of parts shortages, or about accounting and revenue recognition. Their argument pointed out there was still ample supply of the phones at retail partners and across the UK, France and Germany.

"Because shipments to partner stores are recorded as sales and shipments to Apple’s own outlets aren’t, they argued, such an inventory alignment made good financial sense. It was a way for Apple to record more sales." - 2008 worries about iPhone shortages

--

In Apple's case, investors want to know the inventory channel figures not only to determine if Apple can meet demand, but also to help guess when a new model is coming out.

Previously to Apple's recent policy of selling old models next to new ones, it was easy to tell when a new model was coming, because Apple's inventory channel would start to dry up, and retailers could not order more.

--

Now to answer your question directly, the number in Apple's own inventory channel is totally independent of the number in the distribution channel.

There is a common myth that the inventory channel was how much stores had on hand, and that could be used to calculate end user sales...

...however that not only doesn't fit the definition, it's just plain ridiculous on its face, as the world's retailers and carriers do not keep 6-8 weeks' worth of expensive inventory on hand. That's Apple's job. See reasons above.
 

kdarling

macrumors P6
Just curious about where you're getting your numbers? I didn't think AT&T ever stated the numbers for used iPhone activations.

AllThingsD recently posted this chart using numbers from CIRP research -- the same company who said that the iPhone 4S was the majority of iPhones sold last quarter.

previous_phones.png

Using those used phone figures and other info, CIRP estimated that 11% of all iPhones activated, starting in mid October when the 4S came out, were used phones sold/given away by new iPhone owners.

That's for all carriers in a half quarter with the 4S. Normally for AT&T, we'd get more like this calculation:

79% of iphone sales on AT&T are upgrades (2010 survey).
49% of those buyers will sell/give their old phone to someone else(see chart).
87% of those phones are expected to be activated by the new owner(see article).
========
33% total (87% of 49% of 79%)

So for every three new iPhones sold+activated on ATT, one used iPhone is also activated... or 25% of the total activations. That's an impressive used market. Anyway, that's why I estimated up to 20%.

Polite corrections welcome.

Also mighty impressive for Apple is that apparently 70% of all smartphone activations on Verizon and AT&T were iPhones. Very impressive, I think.

Despite this quarter being skewed by the 4S intro, I agree.
 
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twilson

macrumors 6502
Apr 11, 2005
382
16
This argument is so incredibly annoying. In the case of Samsung and let's say the Galaxy S2, You don't ship the millions of units they have unless they were selling, and they are. In some cases you may find that units shipped are greater than units sold, but that would be rare. You'd generally see only a few shipments over a very short period of time.

So enough of this "Units shipped isn't units sold" crap. How about accepting the idea that others other than apple are able to do well?

Not selling as many as they ship is the ONLY reason for Samsung to switch from sales figures to shipment figures. Period!
 
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