Not so long ago, Apple has experienced its first iPhone decline of sales and had to slow down production. That was attributed (rightly) to a change in market dynamics because the phone market has matured. However, new market data from Kantar Worldpanel points out that the Galaxy S7 and S7 Edge are outselling the iPhone 6S and iPhone 6S+ in the key United States market – that is, over the period going from March to May (included).
The report states: “Starting with the US, in the three months ending May 2016, Samsung accounted for 37% of smartphone sales and Apple 29%. However, sales of their respective flagship models reveal a much closer competition, with the Galaxy S7/S7 Edge accounting for 16% of sales and the iPhone 6s/6s Plus at 14.6%.” (Lauren Guenveur/ Mobile Analyst Kantar Worldpanel ComTech).
Note that Samsung does benefit from its launch ramp-up, while Apple does not, so we would like to see what the ongoing monthly rate is.
The report reveals that only 5% of the Galaxy S7 series purchases were made by “switchers” who came from an iPhone handset. This means that Apple still commands a high degree of loyalty, for now. In turn, 14% of iPhone purchases were Samsung switchers. Still, both brands are fighting in close quarters, with Apple claiming an 88% loyalty rate, versus 86% for Samsung – arguably two stellar numbers.
Additionally, both brands are dominating the Western world smartphone landscape, grabbing 100% of the Top 10 phone sales between the two. Not so long ago, Samsung was 50% of the Android handset sales by itself, but we have yet to see a recent report about that. Even in white-hot iPhone markets like Japan, sales are slowing down.
Samsung’s success is due to a consistent drive to improve its products in terms of design, and technology. For example, the Galaxy S7 display camera is obviously better – to the point that even the lay person can spot the difference. There is mounting pressure on Apple to show real improvements, rather than cruising and pondering how to maximize its profits.
Apple’s iPhone remains a very nice and profitable business, but recently, it has lacked the technology leadership that secured it the top spot for many years. Apple’s talent made it soar high, but Samsung’s relentless push is like gravity: it just never stops – and it is paying off with the S7-series, which includes the Galaxy Note 7, which will be launching on Aug 2.