After claiming to have sold two million Galaxy Tabs
, Samsung has been forced to admit that the number was exaggerated. A financial analyst pressed a Samsung executive on the numbers during an earnings call, finally eliciting the acknowledgement that the number represented how many supposed "iPad-killers" were sold to carriers and other resellers, not to actual users. The exec declined to provide hard numbers, but insisted that sales to real people were "quite OK." Meanwhile, a study has shown that many of the people who did buy Galaxy Tabs aren't happy with them: they are apparently being returned at a rate eight times higher
than the iPad's.
In early December, Samsung announced it had sold a million Galaxy Tabs, and bragged that sales were going "faster than expected." Then, in early January, Samsung announced sales had reached two million. This set off a predictable round of crowing
from journalists and observers who all but declared the iPad dead. One analyst predicted that Apple will "have less than 50 percent of the global tablet market" two years from now. "I think that's a certainty," said Neil Mawston, director at Strategy Analytics. His firm published a report
that gave Android tablets a quarter of the market in the fourth quarter of 2010, based on the reported Galaxy Tab sales.
Then came Samsung's quarterly earnings call on Friday, and Android fanbois sensed a great disturbance in the force... as if millions of voices suddenly cried out in terror and were suddenly silenced
Samsung executive Lee Young-hee said the 2 million represented what she called "sell-in:" sales to distributors and wireless carriers, which she said "was quite aggressive." The "sell-out" - distributors' sales to consumers - she said, "wasn't as fast as we expected" because "it was required to have consumers invest in the device." (wow, really?) Nevertheless, Ms. Lee insisted that "we also believe [the "sell-out] was quite smooth," but refused to give any specific totals, saying that "the tablet is relatively new and we need to see how the market develops before we give any firm numbers."
It seems obvious that those numbers are not that impressive, or one would think that Samsung would rush to publicize them as loudly as they had the original misleading report. The problem may actually be worse than that, though: ITG Investment Research says people are returning their Galaxy Tabs
at an abnormally high rate. Crunching numbers from nearly 6,000 wireless stores in the US, ITG found that as many as 16% of all Galaxy Tabs sold from when the device first went on sale in November through January 15th were returned. The Wall Street Journal
notes that he return rate for the iPad at Verizon since its debut on the carrier is just 2 percent.