Samsung Manipulates Galaxy Tab Sales

Investors beware!

WSJ reports that Samsung's actual galaxy tab sales are smaller than the numbers on its balance sheet:

In early December, Samsung announced it had sold 1 million, declaring that sales were going “faster than expected.” Then, in early January, Samsung announced sales of 2 million.

But during the company’s quarterly earnings call on Friday, a Samsung executive revealed those figures don’t represent actual sales to consumers. Instead, they are the number of Galaxy Tab devices that Samsung has shipped to wireless companies and retailers around the world since product’s formal introduction in late September.

I believe what Samsung used were a couple of old trick in the accounting book -- channel stuffing and possibly consigned goods. Samsung executive, Lee Young-hee used the terms “sell-in” to reflect Samsung’s sales to distributors and “sell-out” to reflect the distributors’ sales to consumers. Of course, "sell-in" would be high because distributors are the middlemen passing on the products to consumers. Thus, the important number to take notice is "sell-out." In that aspect, Lee Young-hee said "sell-out wasn't as fast as we expected."