New star in Samsung’s Galaxy ready to shine

Making a choice between the Samsung Galaxy S4 smartphone on the left and Apple’s iPhone 5 on the right Bloomberg

NEGAR SALEK

The Sydney Opera House will roll out the blue carpet and illuminate its sails on Tuesday night for the Australian launch of its newest sponsor’s flagship smartphone, the Samsung Galaxy S4.

It will mark the first such event for the pair since they announced a three-year, multimillion-dollar sponsorship deal this month – the most lucrative since the building opened in 1973.

The evening is expected to attract 250 invitation-only guests and media plus 25 competition winners who will be the first in the country to play with the phone, which is viewed as the leading competitor to Apple’s iPhone.

The Opera House’s landmark’s sails will be lit with a display of user-generated photos submitted to Samsung that captured a memorable moment in Australia.

A “glass-house” on the venue’s western boardwalk will then showcase the Galaxy S4 for general viewing from Wednesday.

A Sydney Opera House spokesperson said it will be the first time publicly-submitted photos would be displayed on the venue’s sails.

MARKETING POWER

Unlike its rival Apple’s product launches, which are typically led by fans lining up outside its flagship stores for days on end, Samsung has aimed for maximum exposure for its local launch, in line with a glittering global launch event in New York last month, which resembled a Broadway show.

Industry analysts have anticipated that the S4 will be a major commercial success. Mobile analyst Neil Mawston at Strategy Analytics told The Australian Financial Review that it forecast Samsung to ship 70 million Galaxy S4 units worldwide this year.

“It will be one of the world’s top-two best-selling smartphones. We expect the S4 to be popular in every region worldwide, especially Europe, Korea and North America,” he said.

In comparison, Apple, which will release quarterly results on Wednesday, Australian time, sold a record 47.8 million iPhones in its first quarter. Despite this being a record, the figure disappointed financial analysts who had expected 50 million.

Analysts will have a close eye on the iPhone maker’s latest shipment numbers as it has suffered a share price slump in recent times. Its stock price has dropped below $US400 from a $US700 high last year, due to a combination of supplier delays and increased momentum towards smartphones running on Google’s Android operating system.

Samsung’s leapt ahead of Apple in smartphone manufacturing last year, according to IHS and it overtook its rival as the top worldwide semiconductor customer, another analyst Gartner showed.

“Samsung are picking up people who have had iPhones and through a fault or failure or normal upgrade cycle they are considering it as their next move,” Forrester Research’s John Brand told The Australian Financial Review.

SEXY WITHOUT THE PREMIUM

Mr Brand said consumers were questioning the value of the iPhone, which was traditionally marketed as a premium device.

“We are seeing a slow migration away from the iPhone, where people are questioning the value that they’re getting. Which means Samsung have pitched themselves as the “good enough” smart phone. Customers want it to be sexy but don’t want to pay premium,” he said.

Some shortages remain in the Samsung framework, however, Mr Brand added. The Samsung Marketplace for example “hasn’t done very well” and lacks the eco-system model that Apple has thrived on. “It’s Samsung and Google providing the competition to Apple,” he said.

His colleague Charles Golvin recently blogged that Samsung is yet to “rise to Apple’s level” when it comes to exercising control over retailers and telecommunications providers.

“They (Apple) do have a couple of things Samsung didn’t: details like pricing and a specific launch date by country and operator. Apple’s brand power allows it to ensure that these critical pieces of information come out at the launch – and none of their competitors, not even Samsung, yet rises to that level,” Mr Golvin said.

Telecommunications providers, Telstra, Optus and Vodafone have enabled a registration page on their websites. And, while high unit sales are expected, they face a revenue challenge as their revenue making services such as SMS are replaced with web-based messaging apps.

“Taking away things like SMS revenue has been a challenge for them. It’s a case of finding other premium services that users are willing to pay for,” Forrester’s Mr Brand said.

According to Strategy Analytics’ Mr Mawston, providers shouldn’t hold their breath for swift emergence of a third competitor to level out Apple’s and, increasingly, Samsung’s market dominance.

“Operators have long been looking for a third smartphone vendor to counterbalance the power of Samsung and Apple, but there have been few credible contenders so far. Nokia, Sony, LG, Lenovo, Huawei and ZTE are the most credible contenders for third place worldwide at the moment. Motorola, with its updated Nexus portfolio, could be a dark horse to watch in 2014,” Mr Mawston said.

PRICE AND AVAILABILITY

It is expected that Samsung and its telco partners will announce the Galaxy S4’s pricing and availability during Tuesday night’s event. It will be available in 16, 32 and 64 gigabyte versions. It touts previously unseen features such as hand and eye gestures, a 5-inch high-definition screen, and a battery that it is more powerful than its predecessor the Galaxy S3.

“We expect the feature-richness of the S4 to be a major draw for the vast majority of consumers worldwide,” Strategy Analystics’ Mr Mawston said. “The web browser, camera and photo-editing will be among the most popular features for mass-market users. Tech geeks will like the eye-tracking software and S Translate,” he said.