Apple Overtakes Samsung As World's Top Smartphone Vendor in Q4 2016

[Michael Scrip]

Not sure what time of custom agreements Apple has with it various retail partners. May differ or may be the same, hard to say. When Apple Authorized Resellers could not sell product and a new released product available, the resellers had the option to discount the item and sell it within a set period of time or send it back to Apple to either redistribute it to another reseller, put it on the refurb store or recycle it. Then again that was a long time ago, not sure what agreements are made now. Curious to know though.

I'm having a hard time imagining a new iPhone 7 box getting opened and the iPhone inside being dismantled and recycled.

There is somebody who wants it. Apple sells iPhones all year long... not just at the usual supply-constrained launch.

The number of iPhones shipped last quarter was 78.3 million units.

So there is some number of units between ZERO and 78.3 million that were actually purchased and that went home with a customer.

Is that number closer to ZERO or 78.3 million?

And if there were some units that didn't go home with a consumer... why and what happened to them?

But again... people want iPhones. I don't see why stores would have trouble selling them and have to send them to be recycled.

 

[ActionableMango]

I think they will announce something great for the iPhone 8/10 anniversary of the iPhone. Early rumours are saying some really nice upgrades so far.

The rumors are out of control.

Curved screen, flexible screen, wireless charging with 15 foot range, no home button, TouchID embedded in the display, bezel-less edge to edge screen, transparent glass sandwich, a new wireless headphone protocol for HD audio, thinner than a razor blade, faster than a PC workstation, doubles as an electric car, alters the space/time continuum, brings peace to the Middle East, and has a MicroSD slot.

Okay that last one is a bit of a stretch.

 

[I7guy]

Logic dictates that if you are the CEO of any company, you are always going to says positive things about it regardless if truth and facts say otherwise. In a CEO opinion "sells well" could mean anything, as we do not know what his expectations are or were.

In an alternate reality, a CEO informs the market that guess what one of our products is not "selling well" however we are still going to sink money into it and risk it in the event this product rebounds and its a shame that we spent a lot of that R&D funds for a dud product. Want to guess how the market will react? ;-)

Plus the facts by Apple is that the iPhone accounts for 69% of its sales and profits is shocking that their have majority of their eggs in the iPhone basket. That is some risky investment strategy.

None of that really addresses the original point.

 

[code-m]

Is that number closer to ZERO or 78.3 million?

And if there were some units that didn't go home with a consumer... why and what happened to them?

But again... people want iPhones. I don't see why stores would have trouble selling them and have to send them to be recycled.

Companies like BestBuy may redistribute stock, sell a given product in an area that there is a demand for or hold a minimum as per agreement/contract with Apple/Carrier.

Open-Boxed items, for example you buy a carrier locked iPhone. Within the remorse period you take it back, the Carrier sends it back to Apple for inspection and may land in the refurb store or recycled. I have yet to see any iPhone 7/+ in the refurb store, so I am guess either customers are happy with it until the upgrade program near the next release or Apple is recycling components of returned 7/+ and we know nothing of it. I suspect the same thing occurs with a damaged iPhone 7/+, it gets repaired or recycled depending on the extent of the damage. In order to sell it on the refurb store, Apple needs to have a certain amount of stock. No point have 100 iPhone 7/+ models only to get sold out in 15 minutes. I do not know what this inventory number is for the refurb store, it may vary from product to product. That being said those costs are factored into a new iPhone.
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None of that really addresses the original point.

Its all subjective to the originator.

As usual it means Tim Cooks lips are sealed and just provides some generic ambiguous response. "We have exciting products in the pipeline" > releases product > only person more excited is the CEO > rinse and repeat, cashes stick/shares and prays their survived another day/year before ones term/contract is fulfilled.

 

[I7guy]

Companies like BestBuy may redistribute stock, sell a given product in an area that there is a demand for or hold a minimum as per agreement/contract with Apple/Carrier.

Open-Boxed items, for example you buy a carrier locked iPhone. Within the remorse period you take it back, the Carrier sends it back to Apple for inspection and may land in the refurb store or recycled. I have yet to see any iPhone 7/+ in the refurb store, so I am guess either customers are happy with it until the upgrade program near the next release or Apple is recycling components of returned 7/+ and we know nothing of it. I suspect the same thing occurs with a damaged iPhone 7/+, it gets repaired or recycled depending on the extent of the damage. In order to sell it on the refurb store, Apple needs to have a certain amount of stock. No point have 100 iPhone 7/+ models only to get sold out in 15 minutes. I do not know what this inventory number is for the refurb store, it may vary from product to product. That being said those costs are factored into a new iPhone.
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Its all subjective to the originator.

As usual it means Tim Cooks lips are sealed and just provides some generic ambiguous response. "We have exciting products in the pipeline" > releases product > only person more excited is the CEO > rinse and repeat, cashes stick/shares and prays their survived another day/year before ones term/contract is fulfilled.

Okay, so your opinion is that Tim Cook will "lie through his teeth" in an attempt to make Apple look good without any substantiation other than "they all do it".

 

[code-m]

Okay, so your opinion is that Tim Cook will "lie through his teeth" in an attempt to make Apple look good without any substantiation other than "they all do it".

Do you believe that Tim Cook does have a conflict of interest to "not lie." If he was not the CEO or had any interests in this company then it may seem credible. However given the facts that he is the CEO and has lied in the past about his "interesting products in the pipeline" that neither you or I may know due to the companies secrecy, then yes I believe there is a conflict of interest.

 

[Sy7ygy]

Apple has gone downhill ever since Steve Jobs passe... wait what?

Yes because short-term profits has ALWAYS benefited the future for a company.

 

[code-m]

Yes because short-term profits has ALWAYS benefited the future for a company.

Every company has hiccups, we have to see if this is Apples hiccup or the beginning or the end for this company. Interesting times.

 

[0388631]

Not surprising after the Note 7 catastrophe. Android handset makers need to be a bit like Apple and provide 16 GB as the base device storage. Mind blowing that after 7 years the base storage for many units is still 8 GB on the low end of the brand's scale.

 

[I7guy]

Do you believe that Tim Cook does have a conflict of interest to "not lie." If he was not the CEO or had any interests in this company then it may seem credible. However given the facts that he is the CEO and has lied in the past about his "interesting products in the pipeline" that neither you or I may know due to the companies secrecy, then yes I believe there is a conflict of interest.

So basically it's down to making things up, since none of what you say can be substantiated. Other than some general hyperbole that's Internet talking points.

 

[Cloudkicker]

Sooooo... a monthly p***ing contest is what you want, eh, Apple? lol

Put your mouthguard in & hold on. Samsung is next w/ their newest Note.

 

[wigby]

Apple didn't perform poorly.

That wasn't the point I was trying to make but thanks I guess.

 

[cracksoup]

Yes because short-term profits has ALWAYS benefited the future for a company.

No it doesn't always benefit the company in the long run. I'm just jumping to conclusions before I know the whole story. That seems to be a thing here on MR.

 

[DeepIn2U]

Apple counts shipped units as sales cause Apple requires all resellers to pay upfront. https://forums.macrumors.com/thread...ak-out-following-simply-mac-closures.2029323/

Tim is a genius.

He is good I'll agree - with number crunching.

In terms of iPhone design ... it's funny every time they change the design people initially are at a "Love It" / "Hate It" and within 4-6mths just about all previous iPhone users end up loving it. Personally for me the 3G was nice (but camera blowed), 3GS was better although just refined, iPhone 4 WOW great design but the iPhone 4S made it useable. The iPhone 5 BOOM EVERYONE loved that device up front! iPhone 6 wasn't feeling it at all, not until someone showed a picture on these forums with it in Leather case + B&O H5 headphones.

I think the case, accesssories and real world user photos of the iPhone really help the sales to other users. I'm just loving the iPhone 6S and lusting over the 7 (massive camera) not sure I can take another major redesign until it's refined but I'll most likely upgrade in 30 days for personal use.

 

[dilbert99]

It's not clickbait, it's exactly what it says. The title states Apple overtakes Samsung as top smartphone vendor in Q4 2016. The numbers show Apple sold 78.3 million in Q4 '16, whilst Samsung sold 77.5 million in Q4 '16. 78.3 is more than 77.5.

ie clickbait, its a misleading title which aims to give the impression that Apple has taken over Apple in the number of phone shipments which is not the case and hence which is what click bait is my friend.
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Nope, clickbait would be:

"Apple Overtook Samsung As World's Top Smartphone Vendor in Q4 2016 with this one weird trick"

Click bait is any tactic that people use to get people to click on links, you gave one example and I gave another

 

[crashoverride77]

It just boggles my mind that iPhone 7, basically iPhone 6 v3, is so popular. No wonder Apple keeps releasing the same phones if people keep buying them.

It always boggles my mind that android phones are so popular yet a brand new android phone is like twice as slow than the more than 1 year old iPhone 6s.
Hey but they got OLED and edge to edge displays, yay.

 

[Carnegie]

And another thing: Apple products never spend a lot of time on any shelf. Apple is pretty good with giving stores just enough stock and replenishing it often.

I can't imagine there is any store who has to send products back to Apple because they couldn't sell them.

When an Apple product arrives in the store... it tends to go home with an owner fairly quickly.

Plus Apple doesn't allow stores order too many and have them all sitting in a warehouse.

Yeah, that's about right and a good point. That's one of the reasons I alluded to without specifying.

As others have suggested in response to you, there typically is considerable channel inventory for Apple products. There has to be, it takes time for products to move through the system and make their way into the hands of end users. But when it comes to Apple products, that channel inventory typically moves along fairly consistently. It's being sold and replenished, sold and replenished. It doesn't - typically - just build up with lots of units sitting in distribution centers or the back of stores not being sold.

At any given time Apple wants to have about a third to about a half of what they expect to sell in a quarter (of a given device) in the channel (there's a wrinkle in that estimation that I don't want to get lost in, but we can discuss it further if you care). They target an amount based on time (e.g. 4 to 6 weeks worth), and thus the amount they target changes depending on, among other things, product cycles. So when it comes to iPhones, they might have 15 million units in the channel - units that they've counted as sales for a given reporting period but which haven't been sold to end users yet. However, at the same time, during that reporting period they might have a different 13 million or 17 million units which were sold to end users but not counted as sales because they were counted in the previous reporting period when they were sold into the channel.

It doesn't matter that there is lots of channel inventory, what matters is how much that channel inventory changed from, e.g., one quarter to the next. If it remains the same, then whether it's 10 million iPhone units or 50 million iPhone units, the new units into the channel are just pushing out the older units in the channel (or, perhaps a better way of looking at it, the new units are being pulled into the channel by the older units being sold). If the channel inventory remains the same, then the 'shipped' units number (basically, the sell-in which is what Apple reports) is the same as the 'sold' units number (the sell-through, meaning units sold to end users). Apple typically tells us what the change in channel inventory was (and whether that left channel inventory within their target range), at least for iPhones and iPads. So it's very easy to figure out what the sell-through was. Knowing where channel inventory is relative to their target range also helps in figuring out whether there is likely to be channel build or channel drain in the following quarter. Though, as kdarling suggests, sometimes there is channel build when it doesn't seem like it was needed. That happened in Q1 2016. How much of that was Apple overestimating demand and how much of it was Apple wanting to make sure it didn't have declining numbers YoY? I'll leave that to others to consider.

For this past quarter iPhone channel inventory increased by 1.2 million units. That's reasonable for a first quarter. (Last year it was 3.3 million units, btw.) Being supply constrained through the quarter for some models would have made it difficult to build channel inventory a lot. Anyway, that 1.2 million unit channel build means that sell-through was more like 77.1 million iPhones in Q1 2017 - still an all-time quarterly sell-through record.

 

[Iconoclysm]

Apple and Samsung have different release cycles. For Apple to NOT exceed Samsung in Q4 regularly, shows just how much bigger Samsung is.

The bigger question is - does it matter? Selling more **** will always get you more volume. Samsung's sales lead in units isn't due to flagship phones competing directly with the iPhone. It's due to the millions and millions of unbearably terrible rubbish phones they sell. At the flagship level, where Apple competes, they've always blown Samsung away.

The problem with what you're saying here is that you think it's Samsung's flagship models that give them these numbers. The fact of the matter is, new Samsung phones typically don't even sell in the same ballpark that new iPhones do.
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It just boggles my mind that iPhone 7, basically iPhone 6 v3, is so popular. No wonder Apple keeps releasing the same phones if people keep buying them.

You do realize that Samsung keeps the same design for 3-4 years regularly, right?

 

[Carnegie]

On another note... I submitted an inquiry to Strategy Analytics regarding the timing of the quarters that they report research for. I haven't heard back from them yet. If I do, I'll provide an update.

At this point, I think it's highly unlikely that by fourth quarter they mean Sept. 25th through December 31st rather than October 1st through December 31st. If that were the case, then it would suggest that when they say 2016 they might mean December 27th, 2015 through December 31st, 2016 as the 2016 numbers that they report for Apple also seem to be lifted from Apple's own reports (which cover that year-plus-5-days period). There isn't anything in the Strategy Analytics press release that indicates that's the case. So I'm assuming, absent evidence to the contrary, that when they say 2016 they mean 2016 and when they say Q4 '16 they mean October through December 2016.

If that's the case, then it means that their numbers for Apple are off - high by, likely, several million units, maybe 5 or 6 million. It doesn't much matter to me whether Apple sold (shipped) a few million more or a few million less units than Samsung in the fourth quarter. I'm not going to buy or sell any AAPL because of it, nor am I going to buy more or less Apple products, nor is the relative ranking a point of pride or shame for me. But for those that do care, this overestimation would mean that Apple perhaps didn't sell more smartphones in the quarter. Of course, since the numbers for Samsung couldn't be lifted from its own reports, those numbers could be wrong as well - they could be too high or too low.

And just to be clear: Though I don't really care whether, as it turns out, Apple sold more smartphones than Samsung, I do care to try to be accurate about such things and in general to the extent reasonably possible.

 

[symphara]

It always boggles my mind that android phones are so popular yet a brand new android phone is like twice as slow than the more than 1 year old iPhone 6s.

You can unboggle yourself: most new Android phones - today's mid-rangers included - are very responsive. I am personally delighted with my phone's UI fluidity and application loading speed, among many other things. And of course they're much better value for money, so popularity is a matter of course.

 

[AllieNeko]

The problem with what you're saying here is that you think it's Samsung's flagship models that give them these numbers. The fact of the matter is, new Samsung phones typically don't even sell in the same ballpark that new iPhones do.

That was my point. That, exactly, was my point. Gosh...

 

[kdarling]

That graph kdarling put up should make Apple immune from any criticism ever again - when have they ever produced anything as abysmal as the Card3? I mean what even was that thing.

You mean this design concept? Samsung never produced it, as far as I know.

As for Apple in the same time period, we have the infamous iPod Phone design:

Plus the early iPhone "extruded case" design types that Ive did which were (thankfully) were cast aside:

Just FYI

 

[jlo1158]

It is impressive Apple can sell that many phones. Is it more impressive than what Samsung has been doing? I already know you would say it is. But generally speaking, it really isn't. Company A sells a product that can only be purchased from Company A. If you want it, you have no choice but to get it from Company A. Company B sells a product that can be purchased from Companies C, D, E, F, G, H, I, and the rest of the alphabet. Even with that competition, Company B still manages to outsell everyone. That to me is just as impressive, if not more.

I know it'll never happen. Just think what would happen if Apple had to compete with just one cutthroat IOS competitor. Apple knows that's why it'll never happen.

 

[crashoverride77]

You can unboggle yourself: most new Android phones - today's mid-rangers included - are very responsive. I am personally delighted with my phone's UI fluidity and application loading speed, among many other things. And of course they're much better value for money, so popularity is a matter of course.

Better value for money? Let's see that after 2-3 years when you sell the phone.

 

[ErikCambridge]

Apple overtook Samsung to become the world's largest smartphone vendor in the fourth quarter of 2016 as shipments reached 439 million units.

According to independent research firm Strategy Analytics, global smartphone shipments grew 3 percent annually to hit a record 1.5 billion units in 2016. Apple shipped 78.3 million handsets in the fourth quarter of the year - around 800,000 more units than Samsung - allowing it to recapture its number one position with 18 percent global smartphone market share.

Bolstered by the popularity of the iPhone 7 and particularly the iPhone 7 Plus, Apple's 5 percent increase in shipments year-over-year helped it secure a 17.8 percent share of the global smartphone market, narrowly beating Samsung's share of 17.7 percent, which was negatively impacted by the company's Note7 battery fiasco. Samsung captured 21 percent share for the full year, marking its lowest level since 2011.

Despite the Q4 results, Samsung maintained first position in annualized figures, with 309 million units shipped worldwide in 2016, compared to Apple's 215 million units. Despite struggling in China against rivals like OPPO, Huawei's impressive overseas performance helped it maintain third position, with a record 10 percent global smartphone market share in Q4 2016 - the first time the company has reached double figures - while OPPO held on to fourth position and grew 99 percent annually to capture a record 7 percent global smartphone market share.

The research comes one day after Apple released its Q1 2017 financial results, in which it reported record results over what corresponds to the fourth calendar quarter of 2016. Cook was bullish on the iPhone's future, and talked up the smartphone's importance across a range of segments, including home automation, health, CarPlay, and enterprise. "I think the smartphone is still in the early innings of the game," Cook said during the earnings call. "App developers are still inventing and there are some exciting things in the pipeline that I feel really good about."

Article Link: Apple Overtakes Samsung As World's Top Smartphone Vendor in Q4 2016

Note that Apple and Samsung each lost market share by about 2 points. The real wiiners are Oppo, Huawei and Vivo.