Samsung to launch Galaxy S4: will it bite Apple?


Galaxy S4 will further cement the company as the world's number one handset and smartphone vendor, says Ovum

With Samsung's Galaxy S4 due for release tomorrow, analysts are debating whether the move will be enough to allow the Korean manufacturer to stay at the top of the device tree.

Currently, Apple and Samsung account for nearly 50% of the mobile handset market, with Samsung way out in front with around a 32% market share, according to CMC Markets, global provider of financial spread betting, CFD and foreign exchange provider.

Michael Hewson, senior market analyst at CMC Markets, stated that the anticipation surrounding tomorrow's launch is even more significant in light of the recent declines on Apple's share price since the highs seen in September last year.

He said: 'It is hard to imagine that a year ago Apple was the stock flavour of the month as it began its push from around $440 to its peak of $715, all in the wake of the launch of a new iPad and iPhone 5. The recent declines in the share price for Apple appear to have found support at the 2011 highs between $415 and $425. If this area were to give way we could well see further losses towards the mid $300 levels. We need to see a rally beyond the $460 level and downtrend line resistance from the September highs to stabilise.

Hewson continued: 'Samsung's share price, on the other hand has been a beacon of stability trading between 1,400,000 won and 1,584,000 won since the end of last year, and even allowing for this week's well publicised launch this stability looks set to continue.'

However, Samsung is currently constrained by its reliance on Google for the Android operating system, stated Ovum. It might be worthwhile for the company to concentrate more on creating a stronger proprietary ecosystem of its own, Ovum's principal device analyst, Tony Cripps, said.

Cripps commented that Samsung still has some major decisions to take to determine what its future role will be in the larger digital economy. He wondered if the company must finally bite the bullet and take a tighter grip on its ecosystem than its alliance with Google currently allows: 'Samsung has been steadily building its reputation as the leading provider of Android smartphones since the launch of the first Galaxy S in 2010 and there's no immediate indication that this lead will suddenly collapse.

'However, while Samsung continues to grow its shipments impressively the company undermines its own position in the broader ecosystem by providing Google a huge mobile platform from which to influence consumers, application developers and advertisers,' Cripps noted. 'It is very difficult for Samsung to achieve that level of influence itself while it depends on Google to supply device software and key applications and services through Android.

'This is not necessarily a problem; assuming Samsung is happy in that role, it can still have a very worthwhile business selling huge volumes of devices. However, lacking a powerful ecosystem of its own clearly positions the company lower down in the value chain than either Google or Apple. This also paves the way for a more consolidated attack on its hardware business from below by manufacturers such as Huawei. If Samsung is serious about increasing its relevance in the lager digital economy it needs to move to rectify this situation sooner rather than later,' Cripps claimed.

More on the launch tomorrow.


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