Only One Seventh
Samsung Electronics solidified its position as the global market leader in the second quarter of this year by selling over 50 million smartphones. Despite widening the sales gap with Apple, Samsung’s profits from smartphone sales were dwarfed by Apple’s, earning them a critique that they “offer less substance than Apple.” Samsung Electronics plans to narrow this performance gap by leveraging their new products, the Galaxy Z Flip and Fold 5.
According to market research firm Omdia on Aug. 7, Samsung Electronics sold (based on shipment) 53.3 million smartphones in the second quarter of this year, recording a market share of 20%. The company’s smartphone sales were down 14.3% (or 8.9 million units) compared to the same period last year. However, Samsung maintained its sales lead in both the first and second quarters of this year. After yielding the top spot to Apple in the last quarter of the previous year, Samsung has reclaimed its leading position. Apple sold 43.2 million smartphones in the second quarter, recording a 16% market share. Sales were down 11.7% (or 5.7 million units) compared to the same period last year.
Although Samsung Electronics overwhelmed Apple in terms of sales volume, profitability was significantly lower than Apple’s. According to Counterpoint Research, Apple recorded an operating profit of US$11.05 billion from smartphone sales in the second quarter. This figure is seven times greater than Samsung Electronics’ estimated smartphone operating profit for the same period, US$1.56 billion.
Samsung’s lower profit compared to Apple stems from the significant gap in the average selling price of smartphones. Samsung has maintained the world’s top sales position by promoting its mid-to-low-priced products like the Galaxy A and M series. In contrast, Apple maintains a high-price strategy. According to Consumer Intelligence Research Partners, the iPhone’s average selling price soared from US$802 in 2019 to around US$1,000 this year.
Samsung Electronics plans to boost its profit margin by launching the high-end Flip and Fold 5 on Aug. 11. The price of the Flip 5 (256GB) is set at 1,399,200 won (US$1,065), up about 40,000 won from its predecessor. The Fold 5 (256GB) is priced at 2,097,700 won, about 90,000 won more than the previous version. Samsung Electronics also has plans to sell over 10 million units of the Flip and Fold 5 this year.
Apple will counter Samsung with its own high-price strategy. It is known that Apple is considering a significant price hike for the iPhone 15, to be launched in September or October. According to Bloomberg, Apple is considering increasing the price of the iPhone 15 Pro (128GB) by about US$100.