Samsung has the smartphone sales top spot, but not because of AI or Apple weakness
Mike WuertheleiPhone 15 Pro Max vs Samsung Galaxy S24 Ultra
Samsung has taken the lead in smartphones sales in the first quarter of 2024 as it has for the last few years, but it's not really about AI nor Apple iPhone weakness.
There's new smartphone sales data for the quarter with Samsung at the top of the heap, gathered and released by the channel monitors at Canalys. The good news for the entire market is that worldwide smartphone sales grew 10% year-over-year mostly because of emerging market expansion, hitting over 296 million units on the quarter.
The story is more complex than that, though.
In the Canalys release accompanying the data, analyst Sanyam Chaurasia points to two factors for Samsung's success. One, the S24 launched a month earlier in the quarter than its predecessor, with the company shipping 35% more devices in the quarter than in the previous year. This makes sense, and isn't particularly noteworthy given that it had a whole extra month to do so.
Secondly, the analyst also points to an "AI-driven innovation" shift in the market, and buzzwords from Wall Street analysts certainly agree with that. Given the fact that the Samsung sales increase quarter-over-quarter is effectively linear given more time to sell the device in the quarter, it's not clear if that assessment is accurate or not, though.
Apple's sales data trajectory for 2023-2024 most closely resembles the 2020-2021 data, but with a higher more recent peak during the holiday quarter. The compares are difficult to make, given that iPhone release times and wide availabilities have varied greatly over the last few years.
There are worries about iPhone sales in the quarter from other sources, and the drum is beating from multiple angles that Apple may have a hard quarter. This was prefaced in January's earnings announcement, with Luca Maestri and Tim Cook warning about a potentially weak quarter.
Samsung taking the smartphone sales lead in the first quarter isn't a sign of that, though. As Canalys' data shows, the Apple and Samsung up-and-down has been relatively consistent for years.
Apple takes the crown when the iPhone launches in the fall, and it generally takes the top spot for the year. Samsung then takes it back with the flagship Galaxy-series release, and its bevy of sub-$200 smartphones.
Samsung itself is on the upswing — but not because of mobile phones. The company's chip business is surging because of increased demand for RAM and price hikes for the commodity across the board.
On the quarter, though, Samsung's mobile devices business reported a 3.51 trillion won ($2.5 billion) operating profit in the first quarter on April 30 in this expanding smartphone market. This is markedly down from 3.94 trillion won ($2.8 billion) in the year-ago quarter.
Regardless of iPhone weakness claims and predictable sales periodicity, the tale will be told on May 3 when Apple releases its quarterly earnings report. And if it is about AI despite not being proven out by this data, Apple is expected to have a counter to that at WWDC in June.
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6 Comments
Maybe Samsung with that top spot will get more resources to get it right in the Android world how's fingerprint and face-id actually working. Or maybe Samsung can tackle the three body problem slow SOC/battery size/memory bloat.
I would also like to know why is its a good solution for Samsung/Google to phone home 3.5-5 hours using a AI function? Can Apple get away that? And would the so-called tech media be adorable about it with Apple?
https://www.wired.com/story/metalenz-polar-id-first-look/ Notice how the Wired is all juiced up about something still in the laboratory? Android a Facsimile phone on so many levels and they still don't have LiDAR something which every iPhone and all iPad Pro's have had for nearly five years.
I think over recent yrs both Samsung and apple r losing business to smaller Chinese vendors particularly in EU. in Japan apple is lost share it was at one point just recently 58% and last yr was 46% and probably 40%or below now . that's mainly becoz Japan is now the biggest market for pixel phones now and grew at 527%
in korea apple is gaining coz of subsidies from carriers
of the 10% decline in iphones by idc only less then 4% is from China so there r declines happening elsewhere
I think iPhone weakness, especially in China may be brought to the fire tomorrow in the earnings call.
Perhaps more worrying is this:
https://www.investing.com/news/stock-market-news/us-moves-to-bar-huawei-other-chinese-telecoms-from-certifying-wireless-equipment-3411401
If that proves true and China decides for a tit-for-tat approach, what would it mean for iPhone in China? And Cisco, Qualcomm etc.
Valid point on timing of the Galaxy S24 launching one month earlier than Galaxy S23. Like you mentioned, Samsung is expected to lead in Q1 2024 due to Galaxy S launch. But Apple's shipments fell YOY by almost 10m units in Q1 2024, so it is not likely it can end the year on top barring extremely high growth of iPhone 16 in 2H 2024.
Regarding the AI features on the Galaxy S24, in Samsung's earnings call they quoted market surveys stating that 50% of Galaxy S24 buyers bought to "try the AI features". So it likely played a factor but to what extent is debatable.