In the heavily contested U.S. market, luxury-smartphone vendors Apple (NASDAQ:AAPL) and Samsung (NASDAQOTH:SSNLF) are locked in a furious battle for market share. And, according to Kantar Worldpanel's recent data, it appears it is now Samsung's turn in the spotlight. On the back of the newest iteration of its Galaxy line — the Galaxy S6 — Samsung regained the market share lead for the three months ended in April.
Consequently, and unsurprisingly, Samsung's share of U.S.-based Android sales increased from 52% in the three months that ended in April to 55% in the three months that ended in May, Kantar reports. The company announced its highly anticipated Galaxy S6 model, so most analysts assumed the aforementioned market share increases.
However, hidden in Kantar's report, is perhaps an ominous warning to Seoul, the Galaxy S5 sold more units than the Galaxy S6 in the three months ended in April.
Asterisks apply, but could be reflective of discontent with new model
To be fair to Samsung, its Galaxy S6 model is at a disadvantage to its predecessor in the three months ending in April. After all, the phone went on sale April 10, only allowing 20 days of sales in the compared time frame. The Galaxy S5, on the other hand, had the entire period of sales, making a direct comparison perhaps unfair. That said, there are still some issues with the Galaxy S5 outselling the Galaxy S6.
Using Apple as a comparison, to gauge the product mix when a new phone is released, the Galaxy S6 performance becomes slightly more worrisome. Many think Apple reports unit sales of the updated model in its first fiscal (fourth calendar) quarter, but generally Apple reports the first weekend of sales at the end of its fourth fiscal quarter (third calendar quarter).
Last year, Apple reported its highest first weekend of sales ever, with 10 million units sold. Overall, the company sold 39.2 million units that quarter, making first weekend sales alone over 25% of the quarter's total. Apple booked another eight days of new iPhone 6 sales that quarter, and while Apple doesn't break down iteration mix in its quarterly reports, it's a safe bet the vast majority were new models.
The key takeaway here is Apple sold 25%+ of its total units in the first weekend alone, and probably substantially more of that quarter's total in the following eight days, while Samsung had nearly three weeks of new Galaxy S6 sales.
More concerning, however, is the Galaxy S5 was widely considered a flop
Kantar's note would be more palatable if the Galaxy S5 was considered a successful model; it wasn't. After bringing the relatively successful Galaxy S4 to market, the next-gen Galaxy S5 failed to catch on in a meaningful way. That demand should have further dissipated in the lead up to Samsung's newest model.
Samsung itself has been rather silent on Galaxy S5 unit sales or shipments, The Wall Street Journal reported S5 sales were 40% lower than the company expected. Samsung was expecting a different sales trajectory on the new unit, with management expecting to sell 70 million units. Reading the tea leaves, it doesn't appear the new model is that type of game changer ... and that's the biggest problem for Samsung.
Admittedly it's early, but it's worth keeping an eye on Kantar's data, especially as it pertains to Samsung. The Galaxy S6 was a design departure from previous models in terms of form factor, losing features like waterproof design, microSD slot, and a removable battery. In addition, the new Galaxy S5 model received the customary off-gen price drop when the Galaxy S6 came to market. If the product mix continues to skew toward the Galaxy S5, Samsung needs to ask itself if it's due to pricing structure or lost features.
Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.