Samsung’s loss in Europe is Apple and Xiaomi’s gain

From Ben Lovejoy’s “Strong iPhone growth in Europe as Samsung sales decline” posted Monday on AppleInsider:

apple iphone europe samsung

Samsung shipments dipped -7% YoY to 12.0 million units in Europe in Q2 2021. Samsung is performing well with new 5G models from the Galaxy A series, but it faces increasing competition from Apple in the high-end and the Chinese vendors in the low-end, and it has failed to take full advantage of Huawei’s demise in Europe.

Apple posted a strong quarter, growing +16% YoY and shipping an estimated 9.6M iPhones in Europe during Q2 2021. The iPhone 12 range continues to resonate with loyal Apple fans who were overdue to replace their aging 4G models.

My take: Books could be written about what Samsung’s smartphones once were and why they aren’t anymore. But not by me.

NOTE: AppleInsider is referencing a Strategy Analytics report to which I don’t have full access.

21 Comments

  1. Romeo A Esparrago Jr said:
    For which Apple remains doomed but no similar reporting for Samsung or Xiaomi. 😛

    5
    August 3, 2021
  2. Gregg Thurman said:
    Awwwww, that’s terrible, the master copier is losing to other copiers, in a race to the bottom.

    4
    August 3, 2021
    • Steven Philips said:
      Blindness leads to mastercopying? 🙂

      1
      August 3, 2021
  3. Jerry Doyle said:
    Samsung’s decline in smartphone shipments comes with little surprise to me. Their competitiveness in the last few years has declined. That decline seems timed with the legal and criminal problems associated with the patriarchal Samsung family owners. If I am correct in this assumption, then it shows clearly how internal distractions can have a deleterious affect on a company’s performance.

    6
    August 3, 2021
    • Bart Yee said:
      @Jerry While I don’t disagree with you, and my views on the corruption of Samsung’s family are well known, it is the whole Chaebol family and Samsung’s complicated company relationships and management structure that is all part of their problems. The individual companies making up the various segments (electronics, shipping, biomedical, insurance, holding companies, etc.) of Samsung have overlapping ownership to stranglehold the Family’s grip on ownership and power. In turn, CEO’s, presidents and managers are beholden to multiple oversight interests and directions. The S. Korean / Asian power structures are both a help and hindrance to independent focus and thinking, leading to relatively little risk taking and a lot of copying and spec focus in the hardware sections which make up most of Samsung Electronics.

      Also, the curious practices of annual performance based promotions and rotations of CEO’s amongst the Samsung Electronics divisions really is there to prevent a single individual from becoming smartly in charge, entrenched, IMO successful enough to potentially threaten the overall power of Jay Lee, the eldest son, and his sisters who now control Samsung Electronics and the rest of Samsung. By shuffling CEO’s periodically, each CEO can undo or alter paths set in motion by predecessors while trying to make their own mark on that division. Link that to shifting market preferences, competition, and disparate marketing, hardware, software, and support commitments, all the while trying to protect the bottom line, and you have a highly UN-focused overall direction of hardware makers who have little to no experience or inclination to build software or ecosystem experiences, thereby being dependent on hardware sales, and have little else to monetize – assuming that there’s actually many Samsung users who would spend for Samsung ecosystem products and services.

      Recently, articles from Sammobile, a Samsung fan site, suggest Samsung is trying to establish and expand a Samsung-centric ecosystem separate from Android, as usual, trying to copy the success of Apple’s decade old lead in ecosystem building, focus and profitability, let alone enriching users’ lives. And again, as usual, too little and way too late.

      5
      August 3, 2021
      • Jerry Doyle said:
        @Bart Yee: I always enjoy your informative synopsis on these unique subjects in the Apple 3.0 forum.

        0
        August 3, 2021
  4. bas flik said:
    in europe samsung has problems with availability and price increases. seems they have more supply chains problems than apple.

    4
    August 3, 2021
    • Bart Yee said:
      @bas The problems for Samsung is their dependence on their own and other sources for chips – with the broadly increased demand for chips, and the fact that most of Samsung’s products are mid to low cost units (smartphones, tablets, chromebooks, etc.) they are highly dependent on fairly generic chipsets or chips that are also in high demand from other makers. With lower margins, you can bet Samsung is loathe to pay more for chips to get supply or production capacity and cut into margin further – Catch-22. Contrast that with Apple who is quite profitable, willing and able to pay/prepay for inventory or production capacity, and with Apple Silicon, able to integrate external chips more readily into its SoC chipsets, reducing parts count, shortening electrical bus/communications paths, lowering power usage, and shrinking component / board sizes overall. Apple can jump supply if they really need it by offering more, knowing their margins can tolerate that or be offset by eventual services growth.

      As for EU supply availability, surely the sea-bound shipping bottlenecks and imbalances have played a huge role in delaying shipments (the Suez canal blockage didn’t help either). When you hear Cook saying “In terms of the cost, we’re paying more for freight than I would like to pay, but component costs continue in the aggregate to decline”, it suggests Apple is willing and able to pay for more costly expedited shipping (say by air instead of by sea) to keep the supply lines moving and product coming into major markets including the EU.

      As Cook notes, he believes current and coming products will be somewhat supply constrained but not demand constrained. For Samsung, having some demand decreases or fade-out after introduction illustrates the frailty of Android product demand, the need for continually giving price discounts and promotions to move inventory and motivate users/buyers, and the price sensitivity of the Android market in general, similar with Tablets, Watches, and the accessories.

      4
      August 3, 2021
      • Gregg Thurman said:
        Fragile vs Anti-Fragile. Apple thrives in adverse conditions while those same conditions strangle Samsung.

        1
        August 4, 2021
  5. Fred Stein said:
    Goodness implied for Apple:

    At 19.2% MS, there’s plenty of room to grow, which they are doing. And each new-to-iPhone sale means other Apple products and services over time.

    Apple’s growth at the expense of Samsung validates once again that Apple-late-to-market (in this case with 5G) costs Apple (and us investors) nothing.

    Sorry Meg V., at 19.2% share, they’re no monopoly.

    4
    August 3, 2021
  6. bas flik said:
    low end of the market Apple addresses with refurbushed phones. Samsung is not able to. Trade in value will be more and more important. in this way ios can maybe grow to 1,5 billion ecosystem. android ecosystem is to chaotic. in the end everybody with a little bit of money will switch to ios. to me services is icing on the cake in compare with hardware.

    5
    August 3, 2021
    • Bart Yee said:
      @bas Absolutely, refurbished and/or passed down, privately sold used iPhones remain active, supported by iOS for 5-6+ years, and expands the user base regularly. The Android used phone market is probably active but phones older than 2-3 years have no further OS updates and inconsistent and erratic security updates at worst, slowly lengthening security update intervals at best. The vast fragmentation of the various Android versions from Lollipop to Android 11 make it very hard (IMO) for Android app developers to support, update, and expand their app offerings, plus know that future development for Android 12 and beyond only reaches a small new portion of the overall Android market.

      2
      August 3, 2021
  7. David Emery said:
    Does Google’s entry into phone silicon spell the end of the ‘single Android world’? I suspect so. Google will be able to do what Samsung could have done, perform system-level optimizations to make their devices a lot more efficient. This is clearly following Apple’s lead (and is a rejection of the arguments made by Baldwin & Rice in “The Power of Modularity” – a fascinating book but probably a bit out of date.)

    So we’ll see Android ‘fork’ into likely 3 groups: (1) Google; (2) Samsung; (3) the bottom-feeders 🙂 And Samsung will continue to get pinched between #1 and #3.

    3
    August 3, 2021
    • Bart Yee said:
      @David I agree with you and Joseph, Google/Alphabet can claim renewed focus on chip and hardware development and I suppose Pinchai’s emphasis on improved Pixel sales and premium placement (at least for the upcoming 6 and 6 Pro, how original) is part of that emphasis. The Tensor chip SoC may be an advance but developing it in conjunction with and maybe being built by Samsung suggest some Exynos ARM influence which to date hasn’t been very good or competitive. I still have my doubts in the short term that Samsung can produce it in quantity and quality under their current 5nm process.

      The real question is whether or not Google is going to commit to even moderate production volumes if they are going to place the 6/6 Pro into “premium” categories like $900-1000 price range rather than the current 5/5a’s midrange position. Considering Google has literally only sold AT BEST, 8M units per annum in 2019, and maybe 5M in 2020, and typically <4-5M units before that (all told, <0.5% market share), their ROI is pretty dismal from a hardware perspective. I really can't see them doing anything but subsidizing hardware and chip development from a short or long term perspective given the low sales / production volumes we are seeing. As I mentioned in a previous post, IMO, the high end Android market is either stable or shrinking, and competition there is Samsung, but undermined by lower cost, higher value Chinese makers like Xiaomi, BBK (OnePlus/Oppo/Vivo) and formerly Huawei.

      Frankly, when you sell only 8-12M projected smartphones in one year, how do you have any pricing power on components when selling in such small numbers – that is the reason for the demise (so far) of the ultra-Flagship Samsung Note series, not selling more than 10M units either/year over the last 2 years. Ego boosts for Samsung and Google, but certainly not much of a revenue generator when costs are figured in. And then there's Google's penchant for shutting down smaller hardware projects if they don't pan out or Google just decides to walk away from them, so much for support.

      I'm sure Google wants to point the way as how Android with optimized hardware can be wonderful and all, but Google probably still doesn't want to upset or majorly compete with its own Android customers, hence despite expressed confidence in itself, the reality will be in the marketplace of consumer opinion and buying/not buying. Did I also mention that the newest Pixels will only be marketed in 8 major markets – USA, Canada, Australia, UK, France, Germany, Japan, and Taiwan, basically where Android fans can afford it. So much for an expanded Google Pixel market footprint.

      3
      August 3, 2021
  8. Gregg Thurman said:
    What surprises about Samsung is they they own a mobile OS, just never did anything with it, and they own their own processor that they sold to others, but never used themselves.

    Being the leading “fast copier” blunts a Company’s vision. You’ll never be anything but a #2, with #3, #4, #5, etc constantly yapping at your heels, and sometimes overtaking you in the race to the bottom.

    5
    August 3, 2021
    • Bart Yee said:
      @Gregg, Samsung’s Exynos processor lines, much like Intel’s, was modeled on various speed and feature version to appeal to many different OEM makers at various price points. In practice, they are workmanlike chips, not the fastest nor power efficient, and typically beaten by Qualcomm chips, and handily beaten by Apple chips. No wonder then in major markets like the US, Samsung smartphones shipped with Qualcomm chips and most of the rest of the world had to make do with Samsung chips. Such is the interdependence of Samsung on buying chips from its chip subsidiary, Samsung Semiconductor, to keep revenue floating amongst itself, same with Samsung Display components. So the Exynos lines were used by Samsung, but for the OEM market, Qualcomm and lately MediaTek were favored for lower costs and better performance or name recognition.

      As for Tizen as an alternative to Google Android, Samsung is primarily a hardware company through and through, so software was strictly a sideline for them even when a need was identified and even supported – they just aren’t terribly good at software development till recently, see Samsung’s notoriously slow Android security and OS updates till 2020. As I said many times on Samsung/Android sites, “why the hell do you put up with slow, late, incomplete, and tortuous OS updates, let alone the restricted 2-3 years tops Android OS update support policies of Android and makers alike, if even that?” They never have an answer other than “oh, that’s just the way it is”, “I’ll just buy another phone in 2-3 years to get the latest OS”, and the best one “OS updates are highly overrated, don’t need them” – fatalism at its best, never will they (although the Android sites do) acknowledge Apple’s leadership in 5-6+ year after purchase support and ability to write software improvements and changes, plus rapid adoption of latest iOS that Android can only have wet dreams about.

      3
      August 3, 2021

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