As Apple and Samsung battle for smartphone market share, numbers matter. The problem, though, can be figuring out which numbers to use and how to match them up.Samsung shipped more than 20 million smartphones in the last quarter, a source told the Wall Street Journal (subscription required), allegedly outshining Apple, which sold 17.1 million phones. Shipments, however, aren't sales, and therein lies the nub.
Citing a "person familiar with the situation," the Journal specifically used the term "shipped" when referring to Samsung's 20 million smartphones. Samsung is due to post its latest quarterly figures next week, but the company no longer discloses specific shipment numbers for its smartphones. Rival phone maker Nokia reported today that it "shipped" 16.8 million units for the quarter.
However, earlier this week Apple reported that it "sold" 17.1 million iPhones during the same quarter ending September 30, and the Journal also used the term "sold" to describe Apple's smartphone figures.
Looking strictly at the numbers, the Journal said that Samsung beat both Apple and Nokia in the smartphone market. But that statement is based on the assumption that sales and shipments are the same. Comparing Samsung with Nokia is valid if we're talking about shipments. But comparing Samsung with Apple isn't if we're talking about shipments for one and sales for the other.
I've seen the same question pop up over and over again from readers and commenters, both on CNET and other sites: What's the difference between shipments and sales? So many stories and reports use the two words interchangeably. But they're not.
Shipments refer to--or at least should refer to--the number of items a manufacturer or vendor sends to retail outlets. Sales refers to the actual number of items purchased by customers. For hot products, shipments and sales may be virtually identical. In most other cases, however, not every item shipped to a retail store is going to be sold to a customer.
Companies also sometimes fudge their numbers using a sleight of hand called "channel stuffing." In short, this trick lets a business conjure up higher sales figures by shipping more products to retailers than the retailers are able to sell.
Samsung itself got caught doing this kind of number fudging with its Galaxy Tab tablet earlier this year.
Samsung initially announced last December that it had sold 1 million Galaxy Tab units. Then in January, the company said it had sold 2 million units. But during a later earnings call with analysts, a Samsung executive admitted that those numbers didn't refer to consumer sales but rather to the number of tablets the company had shipped to retailers. The executive reportedly used the term "sell-in" to reflect shipments to retailers and "sell-out" to reflect sales to consumers.
Apple said it ended the recent quarter with about 5.75 million iPhones in channel inventory, which refers to the number of units that the company was in the process of shipping but hadn't yet sold, providing further details beyond actual consumer sales.
There's no question that Samsung's lineup of smartphones has proven immensely popular. The company recently said that it has sold 20 million Galaxy S smartphones since 2010 and 10 million Galaxy S II handsets since earlier this year.
Unless a significant number of the more 20 million phones that Samsung may have shipped this past quarter went unsold, it's possible the company did beat Apple in unit sales. But there's no way to know for sure who topped who when the terms "shipments" and "sales" continue to be used as if they were one and the same.
