Sales of Samsung’s flagship Galaxy S21 are sinking

From Anil G’s “Here’s how many smartphones Samsung manufactured in 2021” posted Friday on SamMobile:

Of the 300 million units manufactured only 20 million were Galaxy S21 series devices. While not entirely a lost cause, it is unlikely that Samsung will be thrilled that it managed to move only 20 million of its high-end smartphones in an entire year. The lower-end Galaxy A, Galaxy M and Galaxy F phones likely accounted for the bulk of sales.

Friend-of-the-blog Bartley Yee’s take:

If the above is true, the flagship Galaxy S21 series was a monumental failure at only 20M manufactured or sold.  This compares with around 27-28M of the previous S20 series which sold less than the series before that.  Even counting maybe 3M Samsung Foldables in 2021, the profits from this segment would be fairly low.  Note that 60M or 20% of production was by ODM (original device makers, essentially private label for Samsung) producers who build the really low cost Samsung smartphones that just would not be cost effective for Samsung to build themselves.

I’m not convinced that Samsung’s Mobile numbers (possibly buried in the new DX division – Mobile/ Networking combined with consumer appliances) will be very good – oh they may have decent revenue, but profits should be flat to lower YoY.  IMO, Samsung combined these groups together to hide or blur the shortfall in Mobile this quarter and beyond.  Sure, they can claim the highest unit sales, but check revenue and profits in mobile against the total units sold and you’ll find the average sale price under $300, perhaps far under.

Samsung announces earning on the same day as Apple’s (trying to deflect or steal a bit of Apple’s thunder?) and we know by their recent preview they will be making the bulk of revenue and profits via their semiconductor/memory division while Mobile makes up much less.  Samsung Display will do ok because they “supply a major customer who introduced a new line of products this quarter).

In other words, Apple is definitely eating Samsung’s lunch in the high and premium end of the smartphone markets.  The Fold 3 is the only player in the ultra premium market and sales of a couple million, while profitable, is negligible compared to Apple’s iPhone 13 Max alone Rev and profits.

My take: What Bart said.

11 Comments

  1. Romeo A Esparrago Jr said:
    Those low numbers/profits are sustainable because Android makers leverage the R&D & designs of another company. Thanks, Apple!

    3
    January 17, 2022
  2. Michael Goldfeder said:
    Not only eating Samsung’s lunch, but their breakfast, dinner, and bedtime snack! Thanks as always Bart!

    4
    January 17, 2022
  3. Robert Paul Leitao said:
    What’s the compelling reason to purchase an over-priced Android handset? Much of the global market for Android handsets is in a race to the bottom, not to the top. Currently, the iPhone is the top selling brand in China. In the US, carriers are heavily promoting iPhones and for good reason – demographics. The domestic carriers need to lock-in customers on premium, post-paid contracts to cover the costs of 5G infrastructure expenses and the costs of 5G spectrum purchases. In the world today it’s the iPhone and everything else. If, for some strange reason I was in the market for an expensive Android handset, Samsung would not be the brand of choice. For the money I’d want more of a pure Android play. Of course that would mean privacy issues would have to be consciously and willfully ignored to purchase any Android handset. But I digress…

    3
    January 17, 2022
    • Bart Yee said:
      Hi Ken, yes, there’s an element of that. I prefer to call it karma. I like Korean people, I don’t much care for their business practices, especially those practiced by the Lee Family chaebol that controls Samsung – maneuvering interconnected and overlapping ownerships within multiple companies to disperse yet solidify control of various Samsung subsidiaries.

      Lee Kun-hee, the recently deceased Chairman and primary owner was twice convicted of corruption and tax evasion yet was twice pardoned by the then Korean President whom Samsung always had “developed”cozy relationships with. (Similar events happened with other Korean chaebol patriarchs). Kun Lee had a heart attack in 2014, then lapsed into a coma. The family had him hospitalized in a Samsung controlled and run hospital and allowed NO ONE, not journalists, outside doctors, or anyone not Internal to Samsung to see, observe or even get updates on his condition other than that he was in a coma till his “death” in 2020 October. If he had died in 2014, the only son Jae Lee and his sisters, the de facto heirs, would have faced a $5B inheritance tax bill and likely would have had to sell off or divest holdings. Instead the family consolidated control by weaving overlapping cross ownership of Samsung companies owning shares of each other while he spent 6 years in a “coma”.

      An infamous 2017 merger of a Samsung insurance company with a Samsung shipping company (real synergy there) that consolidated family control was blessed by then President Park, AFTER a “donation” of $37M by Samsung to non-profit orgs that a friend and confidante controlled, including funding an equestrian team of which the only member was the friend’s daughter. Park was impeached. Lee was convicted of bribery, given 5 years, but had the sentence reduced on Appeal to 2.5 years. The America Chamber of Commerce, among others, lobbied for his release in 2021 so that Lee could decide / finalize / bless an announced investment of a $17B new semiconductor plant in the US, eventually in Texas.

      After Hun Lee finally died in 2020, the inheritance estate (mostly from Samsung stock holdings) tax bill ballooned to over $11B USD. The family will pay for it with 6 installments over 5 years via loans (probably from Samsung banks), raising dividends paid by Samsung companies (doesn’t that sound like a conflict of interest?), and donating Hun Lee’s 23,000 piece art collection to various Korean museums and organizations. And avoid selling off any control. IMO, it very much smells to me but that’s de facto business as usual apparently.

      0
      January 18, 2022
      • Bart Yee said:
        As for Samsung electronics, their fast copying of Apple’s designs and IP were well known. Their recent mocking of Apple when Apple removed the headphone jack and chargers was lauded until Samsung did exactly the same in their devices within a year. Samsung was legendary in taking 6-9 months to get Android updates out after Android announced them, and followed the 2 year limit for OS updates, and even abandoned some devices altogether. Only in the past 2 years has that speed improved and Samsung now supports its upper end phones for 3 years plus security updates for one more year. Midrange phones get less frequent updates. Only Google Pixels offer 3 years and that’s some of the best in Android land.

        As for Samsung Foldables, they sold about 2.5-~3M Flip / Fold units in 2020. Since the Z Flip 3 & Fold 3’s introduction last August, Samsung has said they have been well received and while industry analysts suggest 4.5-5M is a likely practical increase, Samsung wants us to believe sales are so good they may increase production to ship ~8M units. While impressive, that’s still a pretty small niche market although expecting to grow overall with entries from other big Chinese Android makers. Experts expect the market to expand mightily IF Apple were to enter that market, but IMO why do so if the market may still be quite small?

        And then there’s the legendary failures of Samsung Appliances like washers, refrigerators, and consumer electronics (TV’s primarily) and pretty terrible factory service and customer support here in the US.

        To have a convicted felon head up Samsung isn’t my idea of good corporate governance either but the family is in control anyway.

        So yeah, I have some schadenfreude. But what I occasionally read about and send to PED about a major Apple competitor is based on either research reports or what the company reports. And I’m happy for them that semiconductor sales are booming, that they can raise prices in a tight supply market with huge demands, and that revenue and profits are soaring – sort of makes them a “one-trick pony” being so very dependent on semiconductor for the majority of their revenue and profits. That description was so regularly used to deride Apple wasn’t it?

        0
        January 18, 2022
        • Fred Stein said:
          Thanks for all the detail on the numbers.

          I’m very curious to see if the flip/fold grows into something, or remains a niche.

          Given the small size of the premium market for non-iPhone devices, I suspect the latter, niche. And there’s the resale value. So far it’s terrible.

          1
          January 18, 2022
  4. John Konopka said:
    Those are amazing numbers. Naively, one would think that Apple and upscale units from Samsung would sell in comparable numbers. Clearly the market is making a sharp distinction and telling us loud and clear that these are not commodity items.

    2
    January 17, 2022
    • David Drinkwater said:
      The market is telling us that people who want upscale phones want iPhones and NOT Samsung phones. And that’s great. The fast followers are fading.

      1
      January 17, 2022
    • Robert Paul Leitao said:
      John: Apple and the Android amalgamation serve different markets. There’s also big demographic differences, in general, between the buyers of new iPhone and Android handsets. One of the most overlooked global markets is the market for pre-owned iPhones. In locations where new iPhones are an aspirational purchase and practically beyond the financial reach of many consumers, pre-owned iPhone can fill the void. While sales of pre-owned iPhones aren’t reflected in Apple’s revenue or counted in the reports of new smartphone sales, these smart and savvy consumers add to the global installed base of iPhone users. iPhones remain in service, often in the hands of a second user and sometimes a third user, on average, much longer than an Android handset.

      1
      January 17, 2022
  5. David Drinkwater said:
    I have to add: that photo looks almost as under water as Toni Sacconaghi.

    1
    January 17, 2022

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