Samsung Galaxy Tab Sales Not As Fast As Expected

Samsung Electronics Co.’s Galaxy Tab, the company’s answer to Apple Inc.’s iPad, isn’t selling as well as the company has let on.

Reuters
An employee of Samsung Electronics demonstrates the Galaxy Tab.

In early December, Samsung announced it had sold 1 million, declaring that sales were going “faster than expected.” Then, in early January, Samsung announced sales of 2 million.

But during the company’s quarterly earnings call on Friday, a Samsung executive revealed those figures don’t represent actual sales to consumers. Instead, they are the number of Galaxy Tab devices that Samsung has shipped to wireless companies and retailers around the world since product’s formal introduction in late September.

Pressed by an analyst at an investment bank, the Samsung executive, Lee Young-hee, acknowledged that sales to consumers were “quite smooth,” though she didn’t give a specific number.

In her comments, she used the terms “sell-in” to reflect Samsung’s sales to distributors and “sell-out” to reflect the distributors’ sales to consumers.

Ms. Lee’s response to the analyst:

“Well, your question was on sell-in and sell-out. As you heard, our sell-in was quite aggressive and this first quarterly result was quite, you know, fourth-quarter unit [figure] was around two million. Then, in terms of sell-out, we also believe it was quite smooth. We believe, as the introduction of new device, it was required to have consumers invest in the device. So therefore, even though sell-out wasn’t as fast as we expected, we still believe sell-out was quite OK.”

She added Samsung was “quite optimistic” about 2011 sales but wouldn’t provide a forecast. “As you know, the tablet is relatively new and we need to see how the market develops before we give any firm numbers,” Ms. Lee said.

The comments got little attention in press coverage of Samsung’s earnings report.

A Samsung spokesman in an email said Monday that most media accounts treat Galaxy Tab as “a noteworthy accomplishment.” He added, “I believe the company, overall, is on the same page.”

Corrections & Amplifications

Samsung executive Lee Young-hee said Galaxy Tab sales were “quite smooth,” according to a recording of the company’s conference call with analysts. This post relied on a transcript of the call, which quoted her erroneously as saying they were “quite small.” Samsung said the transcript, done by a third party and initially cited by a company spokesman, has since been corrected.

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    • @Duh,
      Apple reports on actual units sold, to consumers. Big difference!

    • What’s the big deal? Most consumer electronics companies state their sales numbers for units shipped to retailers rather than sell through to consumers. This is not news.

    • Do u think they will reduce the price? How about if they come out with a new model ?

    • That’s because as neat as they are - they are WAY over priced for what you get. Make them $299 to anyone and everyone - without a contract - they’d sell a few million for sure. I’d buy one and I already have an Ipad.

    • Hmm…”sales have been smooth” sounds like a flat sales line.

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