Early this evening, during a New York soiree, Samsung launched the Galaxy S IV smartphone. The venue is atypical. The South Korean electronics giant usually starts from home, offering new smartphones globally before reaching the United States. Now, in a dramatic change, a flagship Galaxy phone lands on Apple's home turf first.
The companies are in a struggle for smartphone supremacy, with Samsung leading in most countries. With one glaring exception: The United States. Today's venue clearly marks the South Korean manufacturer's intentions to take the share lead from its American rival.
One measure of any brand's success is how much people talk about it. By that reckoning, Apple's star is fallen, while Samsung's rises. Consider the amount of rumors the past month or so about Galaxy S IV, which launches this week, and contrast that against near silence about anything Apple. Turn back the clock a year and you'll see modest buzz about the S3 but ongoing Apple rumors that stole the thunder from the Consumer Electronics Show, Mobile World Congress and just about every single new mobile product launch. (Yet this year, Apple efforts to overshadow CES failed.)
Then there was the noise, noise, noise from Apple's patent lawsuit against Samsung, which hundreds of bloggers and journalists used to repeatedly label the South Korean company the world's worst worrisome copycat. In the end Samsung's image is no worse for wear, while Apple rumors wear thin. The most prominent recent one is about a watch. For the wrist? What Citigroup analyst Oliver Chen calls a $6 billion business for Apple. Let me make that clear, because shorthand lacks the impact: $6,000,000,000! That's more than iPod generated in fiscal 2012 ($5.6 billion). Yeah, right.
In the highly saturated U.S. smartphone market, Apple's dominance grew, while iPhone nipped upwards towards Android, for the three months ended in January, according to comScore. The analyst firm, unlike most of its competitors, measures actual subscriber share rather than number of units shipped. Like Gartner's counting actual sales, comScore gives a clearer view of real-world dynamics.
During iPhone 5's first full three months of sales, Apple's share reached 37.8 percent -- up from 36.3 percent in December and 34.3 percent in October. By comparison, second-place Samsung nudged up to 21.4 percent share, from 21 percent sequentially and 19.5 percent for the same three months. HTC, Motorola and LG followed, with respective shares of 9.7 percent, 8.6 percent and 7 percent. All three lost share from December, with LG up ever-so slightly from October. Motorola's loses strongly suggest that at Verizon, carrier with the highly-visible Droid line of smartphones, subscribers shift allegiance to other brands. Good thing Moto has a new evangelist.
Apple's patent case against Samsung took an unexpected turn today. Judge Lucy Koh cut the damages, citing jury errors, removing some devices previously found to infringe the fruit-logo company's patents. Jurors had awarded about $1.05 billion in damages, which now are just $600 million (rounded up slightly). The South Korean electronics giant isn't off the hook by any means. More than a dozen devices remain infringers.
Judge Koh's order is a blow to Apple, but not one that invalidates any real part of its patent victory. The judge found that the jury had inappropriately calculated damages for some products, based in part on their acceptance of arguments made by Apple expert witness Terry Musika.
Samsung might have received a $1.05 billion bloody nose in its battle against Apple last year, but the South Korean giant is coming back fighting, by launching the next version of its flagship smartphone on US soil next month. The first such launch in three years.
Confirmed today at the Mobile World Congress in Barcelona, and in a tweet, Samsung will be unveiling the Galaxy S IV in New York as part of the Samsung Unpacked event on March 14.
Late February means another Mobile World Congress, and the rush to make big, splashy product announcements before the show starts. Samsung jumped in early today, by announcing an 8-inch tablet with stylus -- Galaxy Note 8.0. The slate is about the same size as Apple's iPad, with comparable screen resolution, but features the S Pen and supporting software. Why just touch and type when you can draw, too?
Samsung's slate joins the Galaxy Note II smartphone and 10-inch tablet, with stylus being the compelling feature that market leader Apple doesn't offer on any iOS device. Like the recent update for its siblings, Galaxy Note 8.0 comes with a split-screen, multi-window function. The tablet runs Android 4.1.2 customized with TouchWiz UI.
Bloggers the globe over report today -- and you can hear the snickering -- that Apple's flagship handset outsold Samsung's during fourth quarter. That's because Strategy Analytics director Neil Mawston told them so and they didn't really look carefully at the data: "Apple’s iPhone 5 overtook Samsung’s Galaxy S3 to become the world’s best-selling smartphone model for the first time ever in the fourth quarter of 2012".
Tsk. Tsk. Strategy Analytics mixes "bestselling" with "shipments". They are not the same thing. Shipments refer to units going into the channel (carriers and dealers), while sales refer to product purchased by users (businesses and consumers). Only Gartner measures actual phone sales, so why does Mawston use bestselling in one sentence referring to shipments in another?
"We're No. 3!" will be BlackBerry's and Microsoft's rallying cry this year. Android and iOS so dominate the smartphone market, the best -- and quite honestly dismal -- hope is third; distant at that. Combined, based on actual phone sales, Android and iOS had 90.1 percent share during fourth quarter, up from 74.9 percent a year earlier, according to Gartner. BlackBerry and Windows Phone are neck-and-neck, with lowly 3.5 percent and 3 percent standings, respectively.
Upstarts want third place, too. Anshul Gupta, Gartner principal research analyst, explains: "2013 will be the year of the rise of the third ecosystem as the battle between the new BlackBerry10 and Widows Phone intensifies. As carriers and vendors feel the pressure of the strong Android’s growth, alternative operating systems such as Tizen, Firefox, Ubuntu and Jolla will try and carve out an opportunity by positioning themselves as profitable alternatives".
Americans love their iPhones, finally enough to topple Samsung's long-time leadership. During fourth quarter, Apple nudged ahead of the South Korean electronics giant, with 34 percent share, based on shipments, according to Strategy Analytics. To be clear, the numbers are for all mobiles, not just smartphones. The distinction is important for several reasons. The American company only ships smartphones, for which demand rages. Related: Overall phone shipments fell for the year.
"Apple has become the number one mobile phone vendor by volume in the United States for the first time ever", Neil Mawston, Strategy Analytics research director, says. "Samsung had been the number one mobile phone vendor in the U.S. since 2008, and it will surely be keen to recapture that title in 2013 by launching improved new models such as the rumored Galaxy S4".
On 24 August 2012, after a thirteen day trial and three full days of deliberation, a California jury found Samsung guilty of infringing on several Apple patents and awarded the American company $1.05 billion in damages. The jury also found that Samsung had willfully stolen design elements from Apple, a damning finding which could have seen the amount of damages significantly increased.
Fortunately for Samsung, following post-trial hearings held over the past few months, US District Court Judge Lucy Koh last night issued a ruling overturning the jury’s willful infringement finding, a move which prevents Apple from being able to seek additional damages.
Panic in Cupertino: Headless chickens run around smacking into one another, because they don't know they're dead.
That's the fundamental problem with Apple, and this situation is largely independent of recent stock price declines that analysts, bloggers, reporters and other writers can't opine enough about. Falling shares are part of a necessary correction, as reality displaces perception. To understand what's happening now, you need to look into the past -- three years, which by Internet counting is like a lifetime.
Suddenly, I feel sorry for the folks over at Apple. Chicken Little bloggers and Wall Street analysts run round crying "The sky is falling!" Strangely, they are believed. Apple shares are down 38 percent from September's all-time high. On Friday, the company's market cap fell below Exxon's. Suddenly, the world's most valuable company isn't. I just don't feel right kicking fruit as it falls down, so as a gesture of goodwill my boycott ends today.
That's not to say I have plans to buy any Apple products. I'm more than satisfied with Chromebook and my three Nexus devices. That said, as an act of solidarity, I let Apple auto-charge my credit card for iTunes Match renewal today. I don't own a single device that supports the service, but, hey, what's $24.95 between friends? I was a loyal OS X and iOS user until my boycott started in June 2012, protesting aggressive patent lawsuits -- unaffectionately called innovation by litigation.
Apple executives like to talk about the post-PC era as an opportunity. But they have a post-Steve Jobs crisis that needs resolution first -- and fast. This week's calendar fourth quarter earnings report is time to assess where the company is and where it might be a year from now, and whether investors should lift falling shares from the nosedive.
Post-Steve Jobs -- and I'm talking as much about the time before his death -- Apple has lost the quality that made great products. The company’s approach to computer/device design is consistent and pervasive: Humanization. Apple design seeks to humanize complex technological products. There has been much written about Apple design in context of products that look good. But there is something more fundamental: Designing tech that is easy to use by making it more an extension of the human being -- more part of you. It's this quality missing from recent new product iterations, which aren't any more human-like than their predecessors. Meanwhile, competitors like Samsung do better.
My beloved iPhone 5 recently disappeared -- lost or stolen doesn't matter. Gone is gone. Verizon ticks me off; the warranty is supposed to get me a new one for $100 deductible. But no! VZW wants me to pay full subsidized price again! So, I do what anybody would; I fire Big Red!!!
I go for cost savings and switch to T-Mobile, figuring to buy the top-of-the-line geek Android toy and sell -- or better, trade -- it. I assume the Samsung Galaxy S III is top-geek merchandise but instead T-Mo pushes me towards the Galaxy Note II. What a deal online -- $200. I immediately list it on Craigslist, looking to trade for iPhone 5. To my surprise I get multiple offers. I mean, who as a sane person would want that deal?
ChangeWave has new data out today showing an expected, but dramatic, decline in iPhone buying intentions over the next 90 days and unexpected jump for Samsung smartphones -- two models particularly: Galaxy S III and Note II. One-half of US consumers say they'll buy Apple's handset, but that's down from 71 percent three months earlier. Interest in the South Korean manufacturer's devices surged to 21 percent from 13 percent during the same time frame.
"Consumer buying intent for Samsung smartphones has been extraordinary to start the year", Paul Carton, ChangeWave's vice president of research, says. "Considering the Galaxy S III has been out for several months we'd normally expect a slowdown by now, but it’s still red hot. We’re also seeing strong interest in Samsung’s large-screen phone -- the Galaxy Note II. Super-sized smartphones are taking the industry by storm in 2013". Among those planning to buy a Samsung smartphone, 69 percent say Galaxy S3 and 23 percent Note II.