- 6/29/2025
Category
🛠️
LifestyleTranscript
00:00For years, Samsung has dominated the global smartphone market, even outselling Apple.
00:06But more recently, things have changed.
00:09Their sales are slipping, market share is declining, and Apple has claimed the number
00:14one spot.
00:15What happened?
00:17As it turns out, it's not just Apple that's eating into their dominance, and it's not
00:22just in Western countries that Samsung is losing.
00:32Samsung has been in the mobile business for much longer than you'd think.
00:36They even made car phones in the 1980s, but where our story really begins is in 2007.
00:42When the iPhone was announced, everyone in the industry quickly began panicking.
00:47Some initially laughed.
01:09But pretty soon, everyone saw where the money was going, and realized they needed a smartphone
01:13and fast.
01:14HTC and Google released the T-Mobile G1 the next year, a phone that fizzled out but brought
01:20very, very important new technology.
01:22Telecom providers based their entire strategies around the iPhone, like AT&T's massive exclusive
01:28deal, and their competitors scrambled to find some form of touchscreen smartphone to offer
01:33themselves, which brings us to Samsung.
01:36From the outside, they might have seemed like another company on the smartphone bandwagon,
01:41but they were different.
01:42Samsung was in a unique position, just becoming the second biggest phone producer in the world
01:48in 2007, and had massive manufacturing plants everywhere.
01:52They were the world's leader in LED technology, and they were miles ahead of everyone in OLED
01:57and AMOLED technology.
01:59They dominated the TV market and had just finished beating Sony.
02:03Now, Samsung was coming for Apple, but it would take a bit of time.
02:08While others were releasing half-baked, slow, buggy, and frankly ugly phones, Samsung spent
02:13a couple more years developing the real iPhone killer, the Samsung Galaxy.
02:19I remember the early galaxies, these were about as cool and popular as the iPhone.
02:36Samsung did something else to stand out, something genius.
02:40In his first company speech, Nokia's new CEO Steven Elop said,
02:44The battle of devices has now become a war of ecosystems, where ecosystems include not only
02:49the hardware and software of the device, but developers, applications, e-commerce, advertising,
02:55search, and many other things.
02:57Despite being the man who almost killed Nokia, Elop was right.
03:02The war of smartphones wasn't just about touchscreens, it was about ecosystems.
03:07While Nokia pushed their own OS, Symbian, than the Windows phone which went about as far
03:11as you'd expect, Samsung pushed the real competitor to iOS, Android.
03:17Android was a hugely popular open source OS produced by Google, but Samsung wasn't the
03:22only ones using Android, and many Android smartphones before the Galaxy were pretty
03:27bad.
03:28This is why Samsung waited.
03:30By letting everyone else panic and make mistakes, they could slowly perfect the smartphone and
03:35learn from everyone else, without losing millions like Nokia or Motorola.
03:40Samsung also had more up their sleeve than just Android.
03:43Remember, they were the world leader in LED technology and they were going to leverage that.
03:47This meant you had a phone with possibly the best display, great speed, long battery life,
03:52dual pixel cameras, and an amazing Android UX.
03:56That's no wonder why the Galaxy exploded.
03:59Samsung Galaxy S3.
04:01Designed for humans.
04:03Within 100 days of launch, the Galaxy S3 sold 20 million units.
04:08And things only picked up from there which is where we find some truly baffling stats.
04:12You might think that Samsung was right behind Apple trying to catch up to the iPhone.
04:17But that's not exactly true.
04:19In a way, it was actually the other way around.
04:23They were beating Apple.
04:24In July 2013, Samsung overtook Apple in global market share and only gained momentum from
04:30there.
04:31In Q4, they sold 83 million smartphones worldwide while Apple sold 50 million iPhones.
04:37That put Samsung's market share at 29% with Apple under 18%.
04:42Impressive, but we do need to clear something up.
04:45Samsung was selling more globally but Apple was still dominating within the US with 51% market
04:51share which is where the real money is.
04:53Samsung was far behind with just 20%.
04:56There's also the fact that Apple was the most profitable with the best margins.
05:01But something was clearly in motion.
05:04Globally and even in the US, Apple's lead was slowly shrinking and most of it was being
05:09taken by Samsung.
05:10If you think about it, Samsung at this time was the company to watch.
05:14Overtaking Apple in smartphones, dominating in TVs, pushing new LED technology, and holding
05:20the biggest market share.
05:21Their revenue between 2008 to 2013 more than doubled to $210 billion.
05:28Samsung was very much the leader but that was about to change.
05:41Samsung was on a roll but they quickly saw their growth plateau.
05:44They peaked at 33% global market share at the end of 2014 but since then, it's been
05:50largely flat with a slight decline.
05:53Their presence in the US is the exact same, a bit up, a bit down, largely flat, and way,
06:00way behind Apple.
06:01Their revenue is not so great either.
06:04Between 2013 and 2022, it did grow by $30 billion, but that's with many ups and downs and nothing
06:11compared to their jump from 2008.
06:14And their profits were even more volatile.
06:17Samsung exploded into the smartphone race with the Galaxy but the fire had now dwindled.
06:22Why?
06:23Well, for starters, we need to look at the competition.
06:26Samsung's growth was challenged by rising brands, particularly from China.
06:35Brands like Huawei and Xiaomi were releasing new phones at great prices, and they were good.
06:40The gap between premium and budget smartphones was shrinking.
06:44Sure, the camera might not be as good and it might not have the same ecosystem.
06:50But you could get a pretty cheap phone and it would still look amazing and you'd get
06:5480% of the experience.
06:56Also, these brands weren't just cheap, but rather strategically cheap.
07:01They were cheap where it mattered.
07:03Huawei pushed aggressive R&D and high-quality features at a way cheaper price, while Xiaomi
07:08went for the same processor power, the same screen, but again, just way, way cheaper.
07:13The Xiaomi Mi 5 for example was just $400, yet had a great screen, fingerprint sensor, a camera
07:19with 4K video, and lots of RAM, and all in 2016.
07:25This was a big problem for Samsung in particular.
07:28Remember, they were the bigger global player and in markets like India along with Southeast
07:33Asia and the Middle East, they started losing.
07:36In 2015, Xiaomi sold 70 million smartphones, a 23% jump from the previous year, while Huawei
07:42jumped 58%.
07:44Then, in 2017, Xiaomi overtook Samsung as the market leader in India.
07:50Xiaomi was also cheap in other ways, like their direct-to-consumer sales with a reliance on
07:55flash sales compared to Samsung's traditional in-store sales.
07:59But that doesn't answer everything.
08:02Apple had the exact same competition, yet almost every single year, their global market share
08:08increased.
08:09Why?
08:10These new entrants were a huge challenge for Samsung, but not so much for Apple, who were
08:15very much in the premium market.
08:18This is where Apple and Samsung differ, and why Samsung struggled to grow above 30% in the
08:23US.
08:24The Samsung Galaxy is important, but in actuality, it's only one small slice of the Samsung
08:30Pi.
08:31There's the Galaxy S, the Z Fold or Flip, the Galaxy A series, the M series, the J series,
08:36the F series, all of which have overlapping designs, specs, and features.
08:40Samsung cast a wide net to catch everyone, and theoretically, that's the right move.
08:46But in reality, things work out different.
08:49Many customers might think, wait, is the M better than the J?
08:53But would the A be better than both?
08:55This is called brand cannibalization, meaning Samsung essentially competes with itself.
09:01Apple, on the other hand, almost never does discounts, and has a small selection in each
09:06generation.
09:08You have the 15, the Plus, the Pro, and the Pro Max.
09:12When you shop for an iPhone, it's extremely easy to tell which phone is better in what
09:16way.
09:17Samsung, not so much.
09:20Globally, this worked, but I believe this prevented Samsung from dominating the US.
09:25For you smartphone enthusiasts, you might disagree, but many people don't research every
09:30phone brand when upgrading.
09:3270, 80, or even as high as 95% of buying decisions are influenced by emotional and subconscious
09:39factors.
09:40Samsung had an ecosystem, as expensive as it was, while Samsung was essentially just a
09:45product.
09:46You had the App Store, iCloud, Apple Music, Apple TV, Apple Pay, AirPods, MacBooks, and so
09:52much more.
09:53Sure, Samsung had the Galaxy earbuds and other devices or software, but much of it was third
09:59party.
10:00It didn't quite stack up to Apple, and that's the real key here.
10:04This was already important, but it became much, much more important very soon.
10:17Over the years, we've racked up 160 million views, yet somehow we still haven't reached
10:231 million subscribers.
10:25That conversion rate is even worse than Samsung's slipping market share.
10:29If you've been watching without subscribing, please hit the subscribe button so that we can
10:32finally make 1 million a reality.
10:35It happened in October 2022.
10:38Samsung's global market share dropped below Apple's as they moved into second place.
10:43The long term trend for Samsung has been a bit up, a bit down, but largely flat.
10:48But now, it was starting to go down, and a lot.
10:53The exact same thing happened in the US too.
10:56What tipped the scales against Samsung when they were holding steady for so long?
11:00Why are things shrinking now?
11:01Well, let's add a bit of context.
11:04Markets don't grow forever, even if they seem to be.
11:07That's certainly the case for smartphones.
11:10After over a decade of explosive growth, things have begun slowing down, and this is especially
11:15bad for Samsung.
11:17Q3 2022 was the worst quarter for the industry since 2014.
11:23Shipments globally began to decline and the market dropped 9%.
11:27That doesn't sound like much, but remember, this is the global industry.
11:31Even 1% represents billions of dollars, but it gets worse.
11:37The market shrunk again in 2023, down 4%.
11:40It bounced back in 2024, but the market has clearly flatlined and is even declining.
11:46Okay, so why is it just Samsung then?
11:49Well, it's not just Samsung.
11:51While steady in the US, Apple's global market share has also been shrinking from 31% in
11:57May 2023 to 26% in 2025.
12:01In early 2025, iPhone sales in China dropped 9%.
12:05You might think that's just because of the tariffs and the trade war, but Apple's been
12:10slowing down for a couple of years now.
12:12In fact, they've dropped all the way to third place in 2024 and only have 15% market share
12:18in China after iPhone sales dropped over 18%, the largest drop they've seen in 8 years.
12:25Apple brands like Huawei and Xiaomi have overtaken Apple's throne, but there's something else.
12:30Have you ever noticed how every phone company seems to release a new phone every year?
12:35Well, that might now be coming back to bite them.
12:39While new smartphones are stagnating, the used smartphone market is growing, and by a lot.
12:45That market was $72.9 billion in 2023 with growth of 12.4%.
12:51With how expensive and how many frequent new phones come out, this makes a lot of sense.
12:56Buying a year old iPhone which is 99% as good as the newest one for under half the price,
13:01more and more people are beginning to see the logic.
13:04Interestingly, this used market is dominated by Apple and Samsung who make up 64% of it.
13:11The moral of the story here is that Samsung picked a battle without clarity.
13:15Samsung made great phones and still does.
13:18That's not the problem.
13:19The problem is that they put themselves in an awkward position by trying to market to
13:24premium customers and super cheap customers.
13:27And now they're being squeezed from both ends by Apple in the premium markets in the
13:32US and cheaper brands globally.
13:34But it's more than just selling phones.
13:37It's retaining users.
13:39People who switch to Apple and their ecosystem are very unlikely to switch.
13:43It's hard to say the same thing for Samsung.
13:45The game used to be about selling more phones to more people.
13:49But now it's about keeping users.
13:52Apple's hardware margins are great at 37%, but their service margins are even better, as
13:57high as 73%.
14:00The reality is that Samsung needs to change their game if they want to stay in at all.
14:05If you'd like to earn a 1% bonus every year, consider transferring over your stocks and
14:09ETFs to silo markets.
14:11Until then, I'm Hari and I'll see you guys on the next one.
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