Samsung Q2, 2011: no more then 16.7M smartphones shipped. It’s still #3, behind Apple and Nokia

Ok. That was totally unexpected.

As the earnings season comes to a close, with Samsung’s Q2 earnings report today, we were supposed to have the final data point to see who was  the top dog in smartphones in Q2 2011. And we sort of got it.

It’s Apple with 20.34 million iPhones shipped.

What was really unexpected – it’s who may have come in second. It’s Nokia, with 16.7 million smartphones.

As Nokia smartphone shipments crashed this year, with the onslaught of Android phones like Galaxy S, everyone was expecting them to lose smartphone rankings top spot to both Apple, and Samsung. Some where even predicting that Samsung will beat Apple in smartphone shipment volumes today. But that does not seam to have happened.

Samsung has just reported their Q2 results. And instead of crowing about beating Nokia in smartphone game, or even becoming #1 smartphone maker in the world, Sammy failed to give even a hint about how many smartphones it shipped during the last 3 months. That’s pretty strange, so let’s try to dig a bit deeper, to get at least a plausible estimate of Samsung smartphone sales in Q2 2010.

Samsung has shipped 70 million mobile devices in Q1 2011, 18% of which were smartphones and tablets – that’s 12.6M smart devices and 57.4M feature phones. Today they have reported that their mobile device shipments grew 10% compared to Q2 2010. In the second quarter last year, Samsung has shipped 63.8 million mobile handsets. Add 10% to that, and you get 70.18 million of mobile devices shipped in Q2 2011.

Samsung also said today, that their feature phone shipments decreased slightly compared to Q1 2010. I’m not sure what “slightly” really means – but I will assume that it’s no more then 5%. Samsung is a public company, after all, and they have to be pretty careful about what they say to the public.

So if Samsung feature phone sales declined 5% from 57.4 million they shipped Q1, that will give us 54.53M feature phones shipped in Q2. Which leaves us with no more then a total of 15.65 million of Samsung smartphones and tablets shipped in the second quarter of this year.

That’s a very impressive 24% growth in a single quarter. But still far shy of 18-21 million some analysts were expecting. And, if my assumptions are valid, Samsung’s smartphone shipments are lower then Nokia’s 16.7 million.

Which means that Nokia is still holding #2 spot in smartphone rankings, and Samsung is still #3.

Is that why Samsung was so quiet about it’s smartphone business today?

Update: Upon closer look, it seems that Samsung says that it’s handset YoY sales grew not 10%, but in high 10%, which could mean anything between 15% to 19%, and it’s QoQ growth is in high single digits – again, anywhere between 5-9%. Which gives us Samsung Q2 handset sales range between 73.4 and 76 mil.

On the other hand – since Samsung is explicit on telling us about single digit increases/decreases, and then says that feature phone sales decreased slightly – I believe the actual decrease is less the 1%, which will mean 56.8 to 57.3 feature phones sold this year. So in worst case scenario – Samsung shipped 16.1 million smartphones and tablets, in best case 19.2 million.

With a non-guidance from Samsung on smartphone and even handset unit sales, it’s hard to be sure 100% about the final outcome. Depending on how many tablets it had shipped, and how the final numbers plaid out, there is a good chance that Samsung has passed Nokia in Q2 for a number 2 slot.

But the more I look at a way Samsung has reported data, the more I’m convinced that they still haven’t passed Nokia in actual smartphone shipments, and are still #3.

I checked Samsung quarterly reports as far as two years back, and in every one of those reports, Samsung has disclosed an exact number of handsets shipped in that quarter.  Starting from Q3 2010, Samsung has broken down these handset shipment numbers into percentages – smartphones/total. Making it extremely easy for anyone to calculate exactly how much smartphones Samsung shipped in that quarter. As I did with Q1 2011 numbers above.

And suddenly, this quarter, Samsung goes all fuzzy on us. With high 10%, low single digits, slight declines and what not.  Why would they do that? Why obfuscate the numbers which are clearly very good?

Probably because Samsung wants everyone to think that they have now passed Nokia in smartphones, and they are already #2 in smartphone market.  But the real numbers are not good enough, they have not shipped more then 16.7 million smartphones this quarter. So they obfuscate numbers just enough, to allow analysts to to come to their own, wrong, conclusions and declare that Samsung is #2

A masterful PR move by Samsung

FYI – presentation slides for Samsung’s Q2 2011 earnings call (*.pdf)


Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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