Samsung is about to launch its Galaxy S8 phone, and many may be excited about it, but excitement for new phones doesn’t reflect sales.
As the chart from Statista above shows, Apple’s mobile business is twice as large as Samsung’s. According to Statista, the company may still lead the smartphone market in terms of unit sales, but in terms of revenue, the iPhone alone beats Samsung’s entire mobile communications unit by more than 70 percent.
The hope for Samsung to regain its place lies with the Samsung Galaxy S8 after its faulty fiasco with the Note 7. They need to launch more gadgets that are flawless, to gain more consumer confidence.
You may think “but Samsung sells cheaper options which sell massively, how is its business smaller than Apple’s?” Well, the premium phones are what make up the majority of the revenue and Samsung was selling less of them by the end of last year. The profit margins on premium phones are larger than most gadgets. According to Counterpoint’s Monthly Market Pulse for 2016, we can see that by December apple had 70% while Samsung had 17% of global sales. The
Peter Richardson, Research Director at Counterpoint Research added,
“Apple and Samsung’s share shifts in the premium segment (US$400+ wholesale) have been always been almost a zero-sum game, but the gap has widened to more than 50 percentage point difference. Part of the reason being the absence of Galaxy Note 7 and rising competition from rivals’ flagships such as Huawei Mate 8, Google Pixel and Moto Z in some markets. While Galaxy S7 series sales have been strong, they’ve not been strong enough to fill the void left by the Galaxy Note 7. It will be a testing time for Samsung with the upcoming flagship Galaxy S8 to claw back share and then maintain it until the next version of the Note is launched.”
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