In IDC’s latest report on worldwide smartphone share, Samsung was able to recapture its title as the world’s number one phone maker, recording its biggest quarterly profit in three years. Not only that, the global smartphone industry also showed remarkable improvement by registering 4.3 percent growth in the volume of shipments around the world, easily beating the 3.6 percent growth projected by IDC. With these numbers, various industry watchers now expect that the world of mobile will achieve a full recovery this year, after a rather slow 2016.
The second biggest wireless carrier in America, however, begs to differ. According to John Stephens, the chief financial officer of AT&T, the major US mobile operator has been selling fewer devices, mainly because more and more consumers are deciding to stick to their existing handsets for longer durations. It also helps that AT&T is selling more devices by way of equipment installment plans, wherein mobile users know the full cost of their handsets and opt to pay them off via installments every month. Before, carriers were fond of the subsidy model in which operators do not easily disclose the full cost of devices and then recover those costs by having subscribers pay service fees on a monthly basis.
The AT&T CFO’s statements have not escaped the attention of analysts from Wall Street. Just this week, Wells Fargo analysts wrote in an investors note that if the wireless carrier’s expectations turn out to be true, then the smartphone industry will be facing a challenging task in the next few months, despite the fact that Apple’s highly awaited new iPhone models will surely become massive hits. As pointed out by Wells Fargo, fewer smartphone upgrades will also affect pricing, and accordingly, profit margins as well.
Still, it is worth noting that the two biggest South Korean phone makers -- the aforementioned Samsung and LG -- have recently reported very impressive numbers for the first three months of this year. But there are those that argue that Samsung’s and LG’s numbers were driven by strong sales of the companies’ other products that are not smartphone devices.
Samsung has managed a remarkable comeback from its Galaxy Note 7 disaster last year by shipping more than 79 million units of smartphone devices during the first quarter of 2017. As reported by IDC, the South Korean tech giant did this by offering discounts on its flagship devices last year (the Galaxy S7 and the Galaxy S7 Edge) even while it prepares for the debut of its flagships (the Galaxy S8 and the Galaxy S8 Plus) this year.
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