Samsung steals thunder from rivals with launch of Galaxy S4

Mr Robert Ngeru  (left), Samsung East Africa’s Chief Operations Officer and Mr George Ferreira, Chief Operations Officer of Samsung Electronics Africa answer questions during the launch of the S4 at the Sandton Convention Centre in Johannesburg, South Africa on April 25 [PHOTO: COURTESY]

By PETER OKONG’O

Nairobi,Kenya:HANDSET WARS: Galaxy S4 is the most anticipated technology launch of the year, a phone so smart it’s almost human

What is Samsung’s secret to success? It is a question the consumer electronics giant’s rivals are grappling with as the company launches the Galaxy S4 in Kenya today.

The most advanced Android-based device yet, the S4 is being marketed with such supercharged hype, even Apple, the maker of the niche iPhone series, says it is better than its “Think Different” campaign of the 1990s for the Mac series of computers.

The S4’s marketing budget alone will hit around $150 million (Sh12 billion) globally by the time it winds down. In comparison, the iPhone swallowed just $108 million in advertising spend by Apple last year.

By painting itself as more innovative than Apple, Samsung has succeeded in making the iPhone 5 — an equally good phone although with less razzmatazz — look boring. Apple is now only dominant in the US market.

The S4 is the most anticipated technology launch of the year, the unveiling of a phone so smart it’s almost human. The S4’s nine sensors include a motion chip that allows you to answer the phone and flip through photos using air gestures without even touching the screen.

And you can even operate it while wearing gloves.

There’s more. Buy the S4 and you get a warranty against accidental damage for two years. Known as Accidental Damage from Handling (ADH). It covers the screen against breakage and liquid damage.

“If your phone accidentally breaks, you walk into any of our selected service centres in Africa and they’ll replace it with no extras to pay as a value added service to the consumer, “ says Mr George Ferreira, Vice President and Chief Operating Officer of Samsung Electronics Africa.

Fit every pocket

But there is a caveat; you can only get a free screen replacement twice in two years.

Nothing better illustrates the complexity of the mobile phone industry today than the Galaxy S4, a phone so rich in detail and a multiplicity of applications and new functions.

As well as rude manner in which Samsung has thrust itself into the top of the world’s makers of premium phones.

Nokia, Blackberry, Sony Ericsson, HTC and now Apple. All have been shoved aside with a ruthlessness and focus that is shocking.

The story is in the numbers. Samsung’s main competitor in the premium phone market has been Apple, but sales of the iPhone, the former’s only mobile phone, have been dipping even as sales of the Galaxy climb. So fierce is the rivalry between Apple and Samsung they are locked in over 30 lawsuits in four continents over alleged patent infringements.

The Korean giant adopted the strategy of the most successful motor vehicle company in the world, Toyota Motor Corporation.

While Apple thumbed its nose at making cheaper and bigger phones, Samsung chose to make a wider variety of models including tablets to fit every pocket, and it is turning out to be a winner so far.

Numbers don’t lie: Samsung Electronics posted a record net profit of $5.9 billion (Sh496 billion), pushed up by sales of the Samsung Galaxy S3 and its display panels business.

Analysts had expected Samsung to cede some market share to Apple in the first quarter of the year, but the iPhone sales just didn’t match up to the Galaxy S3, and now Apple has a bigger headache in the Galaxy S4 launched today at a media breakfast in Nairobi.

Things get worse for Apple. Samsung sold 60 million smartphones in the third quarter of 2012 compared to Apple’s 27 million for the iPhone and dipped further in the first quarter of this year.

Unlike the S3, Samsung this time around has pumped money into marketing the S4 with a worldwide tour. The Kenya launch comes two weeks after South Africa’s and nearly two months after the US launch, which is hardly surprising since to date, smartphones still account for only a minute percentage of the local mobile phone sales.

But getting your hands on the Galaxy S4 is not going to be easy as Samsung has struggled to keep up with demand, although it has shortened the time between design of new phones and their arrival to market.

Apple written off?

This is informed by reality as stiff competition means the company that can churn out new and better models faster wins.

And price erosion is expected as the Galaxy S3 is also still pulling in sales. The S4 is officially being sold through mobile phone service providers, Safaricom and Airtel who made pre-orders based on anticipated demand.

The network operators are allowed to set their own prices and Airtel is expected to undercut its rival on pricing after today’s launch.

That would reflect global trends. Korea Investment Securities has forecast a slowdown in the growth of smartphones this year after a period of super-charged growth fuelled by the rivalry between Samsung, Apple, and Blackberry.

The analyst says average retail prices for middle level smartphones should drop 9 per cent to $273 (Sh24,000) before taxes and other fees, although the overall market will grow by 34 per cent to 285 million units.

The Galaxy S4’s recommended retail price is around Sh65,000, but the determining factor will be demand and availability, and how quickly appetite for the S3 tapers off.

But writing the epitaph for the iPhone is premature. The Cupertino-based Apple has already criticised the S4 saying its Android-linked features are less simple to use than the iPhone 5.

Apple has been written off before, only to come back stronger and better, although that was before the death of its former Chief Executive Officer Steve Jobs. It could happen again.

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