Samsung Tab Afterglow Reality Check: ‘Quite Small’ Sales, Quite Large Returns

If you are like me, you love the iPad but were thrilled to see Samsung doing well with the Galaxy Tab. I wrote back at the beginning of December how the Galaxy Tab had sold 1 million units in two months, and Doug wrote about more mainstream attention being paid to the wonderful little Tablet. Personally I think we all benefit from competition – just look at the huge things Nintendo has done in 6 years with the DS in the face of competition from Sony and Apple compared to the tiny changes they made to the GameBoy over 15 years!

So the latest news out of Samsung is just plain sad. Turns out the Galaxy Tab isn’t a phenomenal success after all … in fact, it isn’t even a marginal success. Worse still, the relatively poor sales are being worsened by an astronomical return rate.

Depressed yet? Leave now, it isn’t getting better from here.

Regarding sales, this article at GottaBeMobile has the details:

Per a report from WSJ, Samsung exec Lee Young-hee said, “in terms of sell-out [sale to end-user], we also believe it was quite small.” She goes on to say, “we still believe sell-out was quite OK.” No hard numbers here, but “small” and “OK” aren’t exactly confidence-building adjectives.

The ‘sell in’ that Samsung refers to is what they ship to distributors. According to the linked WSJ article, the two million ‘sold’ is the ‘sell in’ amount … made even worse because Samsung says “our sell-in was quite aggressive”, meaning they dumped tons of units into every possible corner of the retail universe.

As for returns, an article at AllThingsD tells the tale of woe:

ITG Investment Research tracked point-of-sale data from nearly 6,000 wireless stores in the US from the Galaxy Tab’s November debut through Jan. 15 and found the device to have an unusually high return rate. According to its estimates, cumulative return rates for the Galaxy Tab through December of 2010 were about 13 percent. Worse, that percentage is growing as holiday purchases are returned. ITG figures cumulative Galaxy Tab return rates through January 15 were 16 percent. Ugly, considering the return rate for the iPad at Verizon since its debut on the carrier is just 2 percent.

I can’t think of a word other than ‘dreadful’ to describe this. Here we have THE most promising Android Tablet of 2010, as of now the only non-crap competitor to the iPad … and we are learning that the sales were way less than originally reported, AND that they are being returned at a rate even higher than Linux netbooks during the netbook craze. Right after we learn that Apple sold ~70% more iPads than were predicted at mid-year, too.

Sadly I would say that the shine is off the so-called Android tablet craze that apparently never was, and it is going to take something really good to make the Motorola Xoom and other upcoming devices register with consumers. What do you think about all of this?

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4 replies

  1. I was a little surprised and disappointed when I saw these reports too – not because I’m a big fan of Samsung or Android – I think they have a LONG way to go to catch up with Apple and IOS, but because without competition, things tend to stagnate and thats not good for anyone.

    That said, I saw today that Samsung tried to backpedal a bit saying they were misunderstood and taken out of context, but they didn’t really offer anything real to counter what was said in the WSJ article. So I suspect the poor numbers are more true than not.

    I think the interesting thing about the returns is that the report indicated that many people are returning the Tab because of the interface and the fact that most apps aren’t suited for in – in fact – many of them look like crap. But even so, as Honeycomb becomes available and apps start being written in a more device-independent (or at least in a more tablet-centric) way, this situation is likely to change. Will it be enough to drive the market? Don’t know. But it will be a good thing.

    It’s interesting to me that Google’s Matias Duarte even refers to the iPad in extremely positive terms. I think he’s likely to learn as much from the Apple eco-system as possible and it seems like a lot of what we are hearing about the direction of Honeycomb is gong to borrow – to some extent – from Apple’s positives. In any case – I think that current Android 2.x based tablets are not going to be able to succeed because they can’t offer a good, consistent user experience. For many folks it’s just a source of frustration. Honeycomb is likely to deliver a different experience and when devices running it finally start coming out – AND apps start appearing that utilize the hardware and displays of tablets correctly, then we will truly see what kind of competition there will be between Apple’s iPad and Android tablet.

    Of course, but then we will also likely have a new iPad. Hmmm….

    • If you listen to the recording, she said “smooth”, not “small” as initially reported. I don’t know about the numbers or return rate, but I have a feeling that if that (transcription?) error hadn’t occurred, there wouldn’t be as many articles about it as there are.

      • I agree on the sales – folks were happily reporting the 2 million sales without issue. That actually really annoys me, and is becoming more common – folks reporting ‘shipments’ interchangeably with sales. We know that ‘2 million sold’ was a lie, so we can assume that 1 million sold was also a lie … and we are left with nothing but the contrast between ‘aggressive sell-in’ and ‘smooth sell-out’. And to me, that still means that Samsung was unlikely to have broken 1 million actual sales.

        The returns, however, are more concrete and are part of a retail survey of more than 6000 locations. They show customer non-acceptance of the best Android tablet yet, and are not a good sign for upcoming products.

        As I said, I have an iPad and also a Droid, so for me having this competition work is important.

  2. RT @GearDiarySite: Samsung Tab Afterglow Reality Check: ‘Quite Small’ Sales, Quite Large Returns