By Yun-Hee Kim
In its bid to grab a bigger share of the fast-growing smartphone market and compete better with Apple Inc., Samsung Electronics on Wednesday unveiled its latest Android-based smartphone, called Galaxy S II, in Hong Kong. But the launch comes as a plethora of other Android-based devices are hitting the market this year, ensuring competition will be fierce.
Samsung says the new device is slimmer, weighs 116 grams, has a 4.3-inch touch-screen that uses a technology called Amoled and allows the user to edit photos and shoot full high-definition video. It also sports two cameras — an eight-megapixel one in the back and a front-facing two megapixel camera.
Samsung hopes that the new smartphone will help it gain more ground in a market led by Apple and Nokia. Samsung and Apple are currently embroiled in a lawsuit, with Apple claiming earlier this year that Samsung copied its designs on the iPhone as well as the iPad tablet computer. Samsung countersued, alleging that Apple violated patents covering its cellphone transmission technologies.
The South Korean electronics giant, which makes everything from memory chips and phones to flat-screen TVs and home appliances, is the world’s second-largest cellphone maker by shipments behind Nokia Corp., but it still trails Apple’s iPhone and iPad in high-margin smartphones and tablets. Like many other competitors, it was caught off guard by the success of the iPhone. Last year, Apple launched the iPhone 4, its latest version of the popular smartphone, that’s seeing strong demand globally.
Samsung didn’t unveil the price for the Galaxy S II, but in Korea, the company says it retails for 847,000 won (US$784) without a carrier’s subsidy. Typically, Android-based devices have been offered at a cheaper price than the iPhone 4, making this pricing a bit of a gamble for Samsung.
“Android has given Samsung a huge short-term boost. Android and Google services are popular and they have enabled Samsung to enter the smartphone market at a late date and still gain significant market share in just a few quarters,” said Neil Mawston, an analyst at Strategy Analytics. “A major challenge for Samsung will be how well it copes with the semi-commoditization of the Android platform over the next few years — if most Android smartphones and tablets eventually look or feel the same in hardware, software and services, then how will Samsung stand apart from the crowd?”
Samsung’s new smartphone would be competing with not just the iPhone 4, but a slew of Android-based devices from the likes of Taiwan’s HTC, ZTE Corp., Motorola Inc. and cross-town rival LG Electronics Inc.
Samsung contends there’s plenty of room for it to gain business because the market is growing so fast.
Since Samsung launched its first version of the Galaxy S smartphone last year, it has sold 14 million units globally, Younghee Lee, a senior vice president at the company’s mobile communications division, said on the sidelines of the launching ceremony.
J.K. Shin, president of Samsung’s mobile communications business, said in a recent interview at the company’s headquarters in Suwon, south of Seoul, that the company will roll out the Galaxy S II device in more than 120 countries through 140 carriers later this month including Japan. The phone began selling in Korea in late April.
Mr. Shin said the company expects Samsung’s smartphone sales to reach more than 20 million in the second quarter after selling around 14 million in the first quarter. For this year, the company’s aiming to sell 60 million units and maintain a double-digit market share in smartphones. According to Strategy Analytics, Samsung was the world’s No. 4 smartphone maker by shipments with a market share of 12.2%, behind Nokia, Apple and Research In Motion.
Samsung says it will continue to launch new smartphones based on its own mobile operating software, called Bada, alongside Android-based phones. The company will also pour resources in offering so-called feature phones as well as low-tier phones in emerging markets in its bid to have a diversified portfolio of phones.
“We are placing more emphasis on smartphones because that’s where the growth is. But that doesn’t mean we’re pulling out of the feature phone market. Feature phones are still a strong profit driver in emerging markets and in Asia and it still remains an important segment in our business portfolio,” said Ms. Lee.