Galaxy S4: Samsung “Unpacks” A New Mobile Experience

After unprecedented weeks of speculation and rumours, Samsung finally announced the Galaxy S4 mobile phone last night in New York. Never before has a Samsung smartphone caught so much interest. This shows how strong the brand has become in recent years, but it also shows that Samsung is one of the most innovative phone makers.

And end-users have already recognised it. On the other hand all the media buzz is driven by a single question: will this device be able to challenge Apple and impact the market in an unprecedented way? I believe the Samsung Galaxy S4 may represent an important milestone for the Korean company as it may become the first smartphone to outsell an iPhone.

By the end of 2011 Samsung overtook Apple and became the biggest smartphone maker in the world. In 2012 Samsung shipped 218 million smartphones, 30% of total worldwide smartphone shipments. The success of its large portfolio and transition from the mid-tier to the high-end has granted Samsung a solid first position in a very competitive market. Samsung does have areas in which it can improve, most notably with average selling price of its devices.

Apple has maintained the ability to keep its smartphone prices at a premium compared to that of Samsung. Second, Samsung has yet to have an individual model which has outsold any individual Apple smartphone. For example, in 2012 Apple shipments totalled $USD 96.5 billion, 33% of the total worldwide market value, followed by Samsung with 31% or $USD 91.5 billion.

When looking at individual models Apple continued to outsell the Samsung flagship devices. The Galaxy portfolio (Galaxy S, Galaxy S II and Galaxy S III) shipped less volume than the iPhone “portfolio” (iPhone 3S, 4, 4S and iPhone 5). Samsung has been sustaining its market share on the mid/low tier smartphones. The Samsung Galaxy S4 can be a game changer for Samsung. I believe for the first time this device has the potential to outsell the next generation of iPhone, assuming that Apple will incrementally improve the next version of the iPhone.

From the hardware perspective Samsung improved the body of the device, which now looks and feels better than the Galaxy S III. The body is covered with a metal band, which gives it a premium look and feel. At the same time the plastic backing, which was found on previous Galaxy devices, is still present. Samsung clearly needs to innovate its device materials to keep up with the developments seen from HTC, Sony, or even Nokia.

What really stands out is the range of software features that Samsung announced at the event. The company has utilised the device sensors, including new features like temperature and humidity, to gain an advantage by differentiating from its competitors.

By launching the Galaxy S4 by the end of April, as opposed to June or July, Samsung will take advantage of an almost exclusive sales period of several months where high-end competition is minimal. This will put pressure on Apple to further innovate the launch of the next iPhone. I believe this will make competition at the high-end of the market extremely difficult for competitors possibly forcing them to focus on low margin opportunity.

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Francisco Jeronimo joined IDC in June 2008 as research manager for European Mobile Devices. Based in London, he is primarily responsible for research that covers mobile handset trends across Europe. He is also responsible for the European Quarterly Mobile Phone Tracker program. Francisco has been working in the telecom industry for 10 years in countries such as Japan, Finland, and Portugal. Before joining IDC, Jeronimo was responsible for the mobile devices business of LG in Portugal, in particular developing the open market channel and the business with Vodafone. In Portugal, he worked with all the mobile operators and managed the distribution channel of the second-biggest wholesaler. He launched a mobile software development company and did project management and consultancy in mobility for several companies in different industries. Before that, in 1998, he started working for Nokia R&D Center in Japan and then in Finland. He has a master's degree in management from Oporto University in Portugal and is a postgraduate in sales management from Lisbon University with a major in telecoms. He is fluent in English, Spanish, and Portuguese.

  • Jan Dawson

    As anticipated, the device features a slightly larger screen, an improved camera, and beefed up processor power and memory. The company also augmented various features previously available, including its eye-tracking capabilities. The Galaxy S 4 is a worthy successor to earlier members of this line, and will doubtless sell well. But it highlights a couple of the key challenges Samsung faces.

    Firstly, having innovated rapidly over the last several years to vaunt itself into top spot in the world smartphone rankings, Samsung now faces essentially the same challenge as Apple: how to continue to improve its devices year on year when existing phones are already top of their class, and there aren’t obvious shortcomings?

    And secondly, how to set Samsung’s devices apart from other devices that share the Android operating system that provides so much of the functionality? As rivals such as HTC and Sony up the specs of their devices and provide ever better hardware, it becomes more and more important for Samsung to differentiate on software and services.

    The improvements to eye tracking and the additions of S Translator and the hover feature and so on are good steps in this direction, but they can be seen as gimmicks rather than game changers. At this point, Samsung appears to be trying to kill the competition with sheer volume of new features – there should be something here for everyone, even if most of these new features won’t be used by most users.

    For now, Samsung can likely rely on its vastly superior marketing budget and the relatively weak efforts of its competitors in software to keep it ahead. But competitors will catch up (as Samsung has caught up in many ways with Apple) and Samsung will need to continue to stretch. It also needs to build a stronger set of content offerings that cross its various platforms, so that it can extend its leadership in smartphones into the tablet space, and give consumers a reason to buy into an “all-Samsung” experience with their consumer electronics.

    Overall, there are lots of features, but based on past experience most people will never even find them on the device.

    Jan Dawson, Chief Telecom Analyst, Ovum

  • I wish they’d change the design of this phone. The new HTC One looks like a better Android handset.