Samsung caught lying about tablet sales

By , Apr 11, 2014

ipad galaxy tab 10

Samsung, the South Korean chaebol, has an established history of stealing, cheating and lying. It’s not just the conviction of stealing patented iPhone technology that dealt it a massive PR blow, Samsung was also publicly shamed over the discovery it had paid people to spam message boards with negative comments about rival products.

And as if that weren’t enough, its shady marketing tactics has come to light yet again in an internal document proving Samsung intentionally misled Wall Street investors, analysts and market watchers by flatly lying about sales of its Galaxy tablets, thereby creating a perception that the iPad was losing massive market share to cheaper Android competitors…

Thanks to Apple which uncovered a February 2012 internal Samsung document marked “top secret” as part of its ongoing patent infringement proceedings, we now know that Samsung’s U.S. sales of the Galaxy Tab tablets in 2011 were even behind Barnes & Noble’s ill-fated Nook e-reader!

Whereas throughout 2011 Samsung sold just under a million tablets in the U.S., Apple was able to sell 17.4 million units domestically and over 32 million iPads globally. Mind you, Samsung at the time was boasting sales of two million Galaxy Tabs in six weeks, enough to artificially reduce the iPad’s market share by 20 percentage points.

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Image via Fortune.

But how the heck is Samsung able to get away with lying about numbers?

For starters, Galaxy Tab data came via research firm Strategy Analytics and Samsung is a client of theirs.

As you’d expect, once Strategy Analytics put out its flawed 2011 numbers, rival market survey firms like IDC and Gartner went equally creative in guesstimating global tablet sales, all in the service of conveying the notion that Android tablets were winning while Apple’s iPad was supposedly dead in the water.

Diluting the truth is easy when you only work from sales estimates.

Conveniently enough, Samsung in the summer of 2011 stopped reporting smartphone and tablet sales, citing competitive reasons. In fact, most handset makers followed suit, but not Apple. This means that IDC, Gartner and Strategy Analytics numbers represent estimates of shipments, not the actual sales.

screen-shot-2011-03-03-at-7-46-47-am-2

Contrast this to Apple, which reports sales rather than shipments.

When a product is shipped, it’s left the warehouse and has yet to be bought by end users. Thanks to its enormous scale – Samsung has a vast network of resellers, third-party stores and other points of sale – the firm is in a comfortable position where it’s able to boast shipments in the millions whereas in reality it could be just filling up the channel.

AvS.iPad2012share
Image via AppleInsider.

Apple reports a sale when a product is sold directly to an end user via its online or brick-and-mortar stores, or indirectly to its retailers and carrier partners. Once a carrier or an authorized reseller pays for stock and the shipment arrives – a retailer can’t return products to Apple as the money has already changed hands.

Another factor playing to Samsung’s favor: some media outlets which absolutely have no regard whatsoever for fact-checking and story accuracy and are only after clicks.

Case in point: Strategy Analytics in January 2011 claimed two million shipments of Galaxy Tabs in 2010, based on a Samsung executive’s vague comment made to investors. The Wall Street Journal soon after discovered that the figure represented shipments of initial inventory sell-in designed to fill the channel, not actual end-user sales.

That didn’t stop Strategy Analytics to reduce Apple’s market share estimate to 75 percent from 95 percent in less than six weeks. Click-hungry media happily ran sensationalist headlines with Samsung’s inflated numbers.

A few examples:

  • VentureBeat: “Android steals tablet market share from Apple’s iPad”
  • Huffington Post: “Android tablets eat away at iPad’s lead”
  • Computerworld: “Android tablets sales skyrocket, a clear sign that they’ll dominate the iPad.”

Fortune knew better and headlined its story as ‘Android grabs 22% tablet share – not!’

Some went so far as to call Steve Jobs a liar and prematurely call Android a winner in tablets, like the then Fortune writer Seth Weintraub, who now runs 9to5 blogs.

screen-shot-2011-03-02-at-7-00-19-pm

Addressing Apple’s iPad 2 event in 2011 with a surprise Steve Jobs appearance, Weintraub wrote Apple “twisted facts and used an erroneous quotation to try to convince crowds that all other tablets had no shot at de-throning the iPad in 2011.”

Perhaps Jobs could have also compared the iPad 2 to other Android tablets’ prices? Samsung’s Galaxy Tab and Dell’s Streak both now start at $499 and have better cameras, 3G radios and GPS, which seem to compete well with Apple’s $499 Wifi-only offering.  Reality distorted.

The author even suggested that a Dell Streak 7 was “shipping in volume” and that the then new Motorola Xoom “is certainly shipping in volume as well.”

Does anyone remember these tablets now?

Fortune’s Philip Elmer-DeWitt summed it up best:

When Strategy Analytics was telling the world that Samsung sold 2 million Galaxy Tabs in six weeks, the truth was that it took Samsung all of 2011 to sell half that many.

To paraphrase the 1942 American romantic drama film, Casablanca, I’m shocked, shocked to find that Samsung lied about own tablet sales, that research firms spoon-fed inaccurate data to the press and that credulous media outlets happily ran Apple doomsday headlines without doing their homework.

I’m sorry if you feel otherwise, but for Samsung - stealing, cheating and lying seems to be business as usual, the fact bloggers and big media alike are well aware of.

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  • Anthony Snyder

    Sorta expected…

    • lrd555

      Just goes to show all the IDC, Gartner and other market research sights are worthless.

      • rattyuk

        “Just goes to show all the IDC, Gartner and other market research sights are worthless.”

        That’s not entirely true. Because this data was used to knock Apple’s tablet marketshare numbers at a crucial point from a competitors standpoint. To the right competitors this news managed to carry the impression that Apple was “failing” in the tablet space, despite browsing stats proving conclusively that Apple was “winning” the cynical tech press pounded in on this “data” as you would expect.

        Of course we learned nothing really from this as it will simply be rinse and repeated ad nauseam going forward. We suspected what was going on at the time. We now know were were right. We now know there is nothing we can do about it. I feel like JK Simmons character at the end of Burn After Reading:

        CIA Superior: What did we learn, Palmer?
        CIA Officer: I don’t know, sir.
        CIA Superior: I don’t f***in’ know either. I guess we learned not to do it again.
        CIA Officer: Yes, sir.
        CIA Superior: I’m f***ed if I know what we did.
        CIA Officer: Yes, sir, it’s, uh, hard to say
        CIA Superior: Jesus Christ.

  • Hak Attack

    baffled…

  • hkgsulphate

    Not news.

    • ChildishGambinoGotThatSwagger

      This is a news website?

      • Marcus

        Open your eyes and you’ll notice that it is…

    • ✪ aidan harris ✪

      Of course it’s not news. We’ve known for a while now that Samsung lies, cheats and does just about any illicit thing you can think of in order to attempt to gain a competitive advantage. The truth is this usually doesn’t pay off. It’s good to remind people of Samsungs shoddy products and bad business practice once in a while though…

    • Michael

      Ha… tell that to their investors…

  • Rowan09

    There’s a reason Samsung no longer gives sales numbers but instead give shipped numbers. The Galaxy Tab is obviously a flop and that’s why you can buy one for less than $200. My friends son has a Tab 2 and it’s unbareable, you can’t do anything without it freezing. Android tablets come a dime a dozen and a lot of people purchasing them are looking for a discount.

    • Rigs101

      Sooooooo trueeeeee my little brother got a samsung tablet for Christmas and it’s nice I’m not gonna lie but it lags a lot something is always running in the background it’s not mine and I always feel like selling it to get him an iPod atleast

      • Rowan09

        If a kid has an Android tablet it’s because they couldn’t afford to get him/her an iPad.

      • Shingo

        just dont buy it, collect the money and wait till the next birthday….

      • Rowan09

        That’s true, but kids will not want to wait that long.

      • Alan

        You’ll wait longer for the Galaxy Tab to unfreeze..

  • Ziaur Rahman

    We could have seen much better smart devices if they even tried to use half of their Korean brains in making a better phone rather than performing such degrading activities.

  • Guest

    Credulous was correctly used in this article. Good job

    • L Brent Galotera

      I grinned at your comment.. Hah! Right on!

  • Shingo

    One point: all people who use and buy any Shame Sunk products are who is Shame n Sunk personality its no doubt…

  • Anmol Malhotra

    Shame on you Shamesung!!

  • Derrick Tyson

    And they have the nerve to bash the iPhone/iPad in their stupid commercials! LMBO!

    • Christian Mejía

      Laughing my butt off?

      • Derrick Tyson

        Yes.

  • DroidDoesnt_2

    The most shameless, despicable company on Planet Earth…

    • http://mezcudi.tumblr.com/ Mezcudi

      No they’re not. They’re trolls.

    • No

      Hardly. BP the oil company is far worse than anything Samsung has done. Also De Beers

  • http://mezcudi.tumblr.com/ Mezcudi

    I feel like Samsung will come back stronger in the near future, it feels like they just toying around with Apple. Samsung is the biggest troll of this generation, if you have not noticed.
    Samsung has a huge group of people with talents under it’s roof.
    Apple came out with a Sensor button, Samsung did the same in a matter of months. Really fast in my opinion, lol
    Samsung has TVs, Fridges, and a whole bunch of stuff.
    I love Apple, but Samsung will snap at a point of time and surprise us all.

    • Joey_Z

      It’s always easier and faster to copy

    • Rowan09

      What sensor button are you speaking of the fingerprint scanner? The scanner is not that good according to reviews and fingerprint scanners aren’t new.

      • http://mezcudi.tumblr.com/ Mezcudi

        I know, I’m just saying how they came up with one in a short period of time.
        like to show Apple “oh I can do that too”

      • Rowan09

        I understand but they didn’t make it, they just include it in their product.

      • http://mezcudi.tumblr.com/ Mezcudi

        True.

      • Snailpo

        There was a phone that had finger print scanning before apple though to. Apple just made it a big thing.

      • Rowan09

        There were many different phones. You may be thinking of the Motorola Atrix. Apple got it right and that’s why it’s a big thing. They had to purchase AuthenTec to get it right. The other mobile scanners we’re swipe scanners like the S5 and they didn’t work well.

      • diggitydang

        It’s a software sensor, not even a hardware sensor, so it would be easier to implement… not that I know anything about programming that!! Also, it doesn’t even work that well, so I’m not sure you can say that they did the same thing so quickly. So in your comment, instead of Samsung saying “Oh, I can do that too”, it’s more like “Oh, I can do that too… just not as well”. That’s the way Sammy does it though, and it’s why I can’t buy their crap (although my wife does!).

        Now, not to give full kudos to Apple, because they actually purchased the technology but at least they had the know-how to pick up a company that did what they wanted WELL.

        At the end of the day, if YOU’RE happy with Samsung’s fingerprint sensor and overall phone, then go for it. Different strokes for different folks. Samsung is targeting exactly YOU – someone who just wants to be able to say “Oh, I got that too”, without caring whether it’s something you’ll use, or something that will work well.

      • http://mezcudi.tumblr.com/ Mezcudi

        wow. YOU sir need to read my comment again before coming at my neck.

        I don’t even own a Samsung product; I own an iPad (4th), iPod(4th), iPhone (4s,5, and 5s), a Macbook (2011) and a Macbook pro (2013). By that you can assume that I am an Apple fan, what I was trying to say is that Samsung has potential they’re just not utilizing it properly and that they are such trolls.
        My God, smh lol

      • diggitydang

        First off, I don’t mean to come off sounding like I’m going for your neck… sorry about that. High Five… hahaha…

        With that out of the way…

        “I feel like Samsung will come back stronger in the near future, it feels like they just toying around with Apple.”

        and

        “Samsung has a huge group of people with talents under it’s roof.”

        and

        “Samsung will snap at a point of time and surprise us all.”

        and

        “I’m just saying how they came up with one in a short period of time. like to show Apple “oh I can do that too”"

        Those sure sound like you totally love what Samsung is doing and where the company is going… all I’m saying is that it’s people like you (literally, not in a condescending way) that can appreciate a feature, even if it’s not working as well as it should be. Personally, I’d rather have a feature that works close to flawlessly… that’s why I hated Apple’s Maps (still don’t use it) and how you tap an address and it takes you to that app, not Google Maps. BUT, at the end of the day, there’s so much I appreciate about how Apple approaches features, design and UI, that I stick with them.

        Another high five…

      • http://mezcudi.tumblr.com/ Mezcudi

        lmao, I love you, you sarcastic asshole.
        Jumping high five. :)

        yeah it did sounded like I was a huge fan, but I’m just saying these guys do have potential. I’m not saying apple don’t have its flaws (agree with you on the map thing, with the addition of newsstand.)

        I just feel like they’re not giving it their all or something.

      • diggitydang

        hahaha… I accept that jumping high five and am now going for a low, backwards five… don’t leave me hanging…

        I don’t think Apple isn’t giving it their all… I remember reading something about Steve Jobs’ dad giving a young SJ a lesson on doing things the right way. He was giving the example of painting a fence or something, and taught him that even though you don’t see the other side, it doesn’t mean you don’t paint it or care for it… I’m probably butchering that lesson, but you get the idea. I think that’s one thing SJ ingrained into Apple – that if they’re going to do a feature, make sure it works well from every conceivable angle. If it doesn’t/can’t work that way, don’t do it at all. Samsung basically doesn’t seem to care about the other side of the fence – it seems like they barely care about the front of the fence! They seem to just care that there’s a damned fence and want to move onto making other fences so they can say they’ve got the MOST fences… ya know what I’m sayin?

        Oh, and then they lie about the quality of their fences sold (*cough* shipped), and add qualities to the fence just to pass tests that are not a true representation of the actual quality of it…

        I don’t know… I just can’t respect a company that operates that way (Samsung, not Apple).

    • Qasim

      Its pretty easy to develop something tweaking a lil bit when the idea is already out

  • Joey_Z

    Tried to find sales number in Samsung’s annual report. It only shows total revenue from mobile division, no sales volume to it’s individual product or to different markets, and Samsung mobile is buried in piles of numbers from other businesses of Samsung. I’ve always been curious where some “analysts” got their numbers… Tried to look up Apple’s annual report, every product was clearly listed in detail. If I ever need an android, I will buy HTC for sure.

    • Rowan09

      I would only buy the HTC One if I was to switch. Samsung no longer gives sales figures only shipped numbers which is a smart business move.

      • rattyuk

        Samsung never gave sales figures, just total units sold. With a bit of sleight of hand they implied that their sales were all at the top end with their hero phones when, in fact, the vast majority were at the bottom end.

        The S4 was supposed to sell 100 million units last year. They achieved around 40 million. The S5 has most had “meh” reviews.

        But they have a more serious problem, cheap Chinese Android phones which are going to destroy their cheaper offerings. Add to that the fact that Apple are moving their component orders away from Samsung’s component division, it looks like Samsung are going to reap what they have sown over the last few years.

      • Rowan09

        That’s true

  • Technocrz!

    As expected, its in the DNA of Koreans, they bitray, steal and then back stab you.

  • Andrew Roth

    Shamesung… Samsucks…

  • iApplefanboy7

    Bought a Galaxy tab 3 7 inch. Not very good. Bad company, bad products.

    • Rowan09

      Because it was cheap right?

      • iApplefanboy7

        Mediocre performance at the $200 price point. Not a winner in my book. Cheap cost, yep. Cheap quality too.

      • grumpyfuzz

        Nexus 7 is cheap, yet is a great product.

      • Rowan09

        Yes but it’s cheap because Google doesn’t care about hardware sales, so it’s a different model.

      • grumpyfuzz

        I picked one up for $200 (was a deal at staples). The original price is $229, though. Also, the Nexus 7 is the only nexus product I’ve seen advertised, but either way I agree with you and I don’t think they care about hardware sales.

  • Qasim

    Pathetic little *i cant even think of a word bad and mean enough to describe them*, shameless bunch of idiots

  • leart

    Samesushi

  • Qasim

    That was a big misstatement, it may have altered the decisions of investors, this totally is against the financial reporting laws, just blow it up a bit and u may have another enron scandal on your hands

    • Rowan09

      If it was Apple we would continue to hear the doomsday stories and lawsuits would pile up.

  • YourHonored

    samsung has also been caught cheating on benchmark tests by ramping up CPU on apps commonly known to be used for the tests

  • diggitydang

    I don’t know why I hear this stuff and I’m still so surprised… perhaps because each time something like this happens, I think that Samsung can’t possibly do anything more shameful than THAT!!!! *SMH*

  • Martin

    Ohhhhh my brain hurts of this STUPIDITY. Oh my Dog… -_-

  • dpacemaker

    I find it funny that 9to5Mac isn’t covering this at all. Could it be because the person that runs it has his foot in his mouth.

  • Michael

    If these patent lawsuits have been good for anything, it has been exposing all the crazy things Samsung does.

    • L Brent Galotera

      High Five!!

  • El Matador

    iLied. Again. – Samsung

  • jack

    damn gooks

  • http://173.58.214.169/ Anthony3595

    Samsucks. Meanwhile HTC One is the best android phone you can get.

  • Taf Khan

    Poor effort Samsung, nobody wants galaxy tablets.

    • N&LH

      Just in case someone wants to downgrade

  • chris125

    I thought this was known years ago. Did anyone actually think these sold well at all?

  • AnthLC

    This needs to be reported more as the deception is when it is believed to be fact and not fiction. It will distort the market. Great article.

  • onebyone_

    I have an iPhone 5, my friend have an S4 his screen is crashes because is too big to put into his pockets front pockets and sit.
    The only Android device that I respect out there is HTC One M8.

  • Batman

    All those nasty stuff, just too many reason to be called Shamesung, not just because of copying Apple. Shamesung, you deserve it.

  • TheShade247

    I lol’d when i read the title

  • TheShade247

    Of course its Samesaung

  • http://www.idownloadblog.com/ Raul Henriquez

    Kurt is one of those people right here on idownloadblog who is being paid by apple

  • jack

    damn gooks

  • Kyle Duguay

    Cheaters never win…

  • Tommy

    Everybody lies. God Christian, you sound like such a total fanboy getting all bitchy about Samsung. It’s just PR. We, the consumer, just simply don’t care. We buy what we want whether or not Apples market share is number 1, 2 or 10.

  • Shankar Dasika

    another half assed article from a half assed author.
    Rest of the authors here try to impress us by saying apple is good
    but this author try to impress us by throwing dirt on others and feeding negativity on others.

    You sir are wonderful keep up the good work

    Ps: I stopped coming to this blog beacuse of this guy so dont care to see what anyone comments this stupid rss feed showed me this article from which I was about to remove this bias site anyway

    • Mhmd Bassam Nasyr

      hi nobody cares go away :)

      • rattyuk

        He cares enough to create an account to simply make the one comment. So someone who doesn’t comment signed up to say that he’s “leaving the blog”. Hmmm. Surely there must be something more constructive he could do?

  • Vckmkr

    Dont be fooled into beleiving that appl are some how morally superior to any other market leader, they are as corrupt and deceiptful as most WallSt companys, how do you think appl or anyone gets internal ‘eyes only documents from an adversary? The most common method is industrial espionage, i personally know exploit brokers who would never breach client confidentiality, but will say that he/she brokers many deals on exploits thats can really only worth $15.000 if used againt their direct competitor in the current market. Capitalism by design requires you to lie, steal & cheat anyone to (the more the merrier), in order to be successful via traditional methods.

    • MyIdea

      Samsung’s tablet web usage is increasing. They are increasing their tablet sales. It’s just that it’s by a relatively small amount, not by the giant amount IDC claims based on Samsung’s reported shipments (lol).

      Samsung: tiny gains in tablets, treading water in phones, declining in high end phones.

      The big proof that Samsung is lying about its supposedly stellar sales, is Samsung’s steadily declining profits.

      If IDC’s numbers were correct Samsung’s profits and stock price would be up, but instead, they’re on a decline that seems to have no end in sight.