Apple Rules Q4 but Samsung Takes 2011 Smartphone Sales Crown

Killer Apple iPhone 4S sales enabled Apple to take back the distinction of No. 1 smartphone seller during the fourth quarter. Samsung, however, was the overall 2011 winner.

Apple and Samsung continued their neck-and-neck race as the top smartphone vendor through the fourth quarter of 2011, with Apple bolstered by sales of its iPhone 4S.
As predicted, the October arrival of the much-delayed iPhone 4S enabled Apple to pull ahead of its Android-supporting rival and reinstate itself as the No. 1 worldwide smartphone provider during the quarter-a distinction it first gained during the second quarter and lost to Samsung during the third, according to numbers from market research firm IHS iSuppli.
Samsung, though, posted "explosive" growth of 278 percent year over year, making it the world's No. 1 global smartphone brand for the full year 2011, IHS iSuppli reported in a Jan. 27 note that only included data for companies that have already reported their fourth-quarter results.
Apple's return to the throne, however, arrives with an also-explosive Jan. 25 expose' from The New York Times, detailing the "human toll" that the production of iPhones and iPads takes on generally young and poor workers in China.
Apple shipped 37 million units during the fourth quarter, up from 17 million the quarter before. Samsung, fighting the good fight, shipped 36 million units, up from 28 million the quarter before.
"Samsung advanced in 2011 because of its strategy of offering a complete line of smartphone products, spanning a variety of price points, features and operating systems," IHS Senior Analyst Wayne Lam said in a statement. "This enabled Samsung to move past perennial market leader Nokia and to slightly exceed Apple's total for the year."
Apple claimed the year's second-best performance, with a total of 93 million units to Samsung's 95 million. Nokia, once the long-time leader, again lingered behind the two, shipping 77 million phones in 2011, down from its market-leading 100 million in 2010.
Sony Ericsson and Motorola shipments remained flat from the third to fourth quarters, shipping 6 million and 5 million, respectively. Sony Ericsson shipped a total of 20 million units for the year, to Motorola's 19 million, not sharing in Samsung's success, despite their similar investment in Google's Android OS.
"The relatively small growth of Sony Ericsson and Motorola may indicate that the Android smartphone market is becoming too crowded, as the various licensees compete for limited consumer mindshare and shelf space," Lam said.
On Jan. 24, Apple announced fiscal 2012 first-quarter revenue of $46.33 billion and sales of 15.43 million iPads and 37.04 million iPhones, a good number of which sold in China, where a rising middle class has shown an insatiable appetite for Apple products, making China Apple's No. 2 market after the United States.
The Times' report, however, tells a story of Apple, echoing documented Walmart-like tactics, demanding ultra-low prices from suppliers, which, left with very minimum profits, scramble to cut corners wherever possible.
"Most suppliers are allowed only the slimmest of profits," The Times reported. It went on to quote an employee at a company that helped bring the iPad to market and told The Times: "The only way you make money working for Apple is figuring out how to do things more efficiently or cheaper. And then they'll come back the next year, and force a 10 percent price cut."
An unnamed Apple executive was quoted as saying, "You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards."
As the IHS figures back up, the executive added, "Right now, customers care more about a new iPhone than working conditions in China."
Apple CEO Tim Cook angrily defended the company, saying it cares about workers throughout its supply chain.