Samsung Electronics Co Ltd (OTCMKTS:SSNLF) released its comeback Galaxy S8 smartphone on April 21. And while Samsung reported pre-order sales records in the U.S., it appears that was a temporary win. A new report shows that Apple Inc.’s (NASDAQ:AAPL) iPhone sales remained strong in the American market in May, despite the new Samsung flagship smartphone.
In fact, the iPhone 7 and iPhone 7 Plus remained the top sellers, while Galaxy S8 sales actually trailed that of 2016’s Galaxy S7 and Galaxy S7 Edge.
Apple iPhone Sales Gain in the U.S. Market
Kantar Worldpanel released a report on smartphone sales with several areas of coverage.
According to the research firm, during the three months ending April 2017, iPhone market share in the U.S. was up 5.8% year-over-year to 36.5% of all smartphones sold. In Europe, the company posted a more modest 1.1% gain to take a 19.3% share.
In the Chinese market, AAPL’s fortunes were the reverse. Compared to the same period one year ago, iPhone sales slipped 3.8% to 16.2% of total smartphone sales. The iPhone 7 and iPhone 7 Plus combined to take 8.5% of all smartphone sales in that region.
Galaxy S8 Sales for May Stumble in the U.S.
One of the most interesting aspects of the Kantar Worldpanel report focused on the American market for the month of May 2017. This was a critical time, for Samsung and Apple. Samsung announced the new Galaxy S8 series at the end of March, with pre-orders starting immediately and an April 21 launch.
This was a crucial release for the South Korean company, its first flagship smartphone launch since the disastrous Galaxy Note 7 and its exploding battery. The Galaxy S8 came with a new Infinity Display and skipped the Home Button on the front — beating AAPL to the punch with what have been expected to be key iPhone 8 features. It also marked the debut of Bixby, Samsung’s own virtual assistant. According to Samsung, pre-orders of the new Galaxy S8 shattered its previous records, beating Galaxy S7 pre-orders in the U.S. by 30%.
However, according to Kantar Worldpanel’s data, that surge in Galaxy S8 pre-orders failed to translate into sustained sales, at least in America. While there were predictions that the new Samsung smartphones could hit AAPL hard, in the U.S. Galaxy S8 sales for for May — the first full month of the phone’s availability — accounted for just 8.1% of all smartphones sold. That’s down from the 8.8% the previous generation Galaxy S7 held during the same time period last year.
As for AAPL, despite the launch of a new Samsung flagship smartphone, grumblings that the iPhone 7 series looks just like the iPhones it released the previous two years, and the expectation that AAPL fans might begin holding off on purchases until the iPhone 8 is released in the fall, the iPhone sales picture was much rosier. On top of that increase to 36.5% of all U.S. smartphones, the iPhone 7 and iPhone 7 Plus combined to take 20.1% of all U.S. sales for May.
There are a few interesting trends showing up in the Kantar Worldpanel report. The first is that Samsung is not seeing the flagship smartphone rebound it was hoping for, indicating the Galaxy Note 7 episode may have done lasting damage in the important U.S. market. Additional competition from premium Android smartphones like Alphabet Inc’s (NASDAAQ:GOOGL) Google Pixel Phone may be doing some damage there as well.
The second is that AAPL’s iPhone marketshare is holding solid in mature U.S. and European markets, even making some gains. Despite the pending iPhone 8 release, so far this year, its iPhone sales have held up. However, in China — one of the markets where AAPL was hoping to make real gains — the company still hasn’t found the right mix of features and price to make the kind of headway it would like to.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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