This article is more than 1 year old

Samsung plans to smash Android rivals..what about the iPad?

Competitors and Apple should prepare for war

The most dramatic aspect of the smartphone market in the second half of 2010 has been the reinvention of Samsung. Samsung's Galaxy S has shipped 7 million units and has set targets of 20 million for this year – plus one million tablets.

Always a powerhouse in mass market handsets and feature-packed media phones, the Korean giant was still the ugly duckling of open OS smartphones. But the success of its Galaxy S Android range, and to a lesser extent the Wave, which runs its own bada OS, have turned it into a swan that is giving Apple a run for its money in terms of mobile allure – and aims to have the same effect in tablets.

Samsung is targeting over 40m unit sales in this category next year, according to mobile division chief Shin Jong-kyun. He told the Nikkei business daily that Samsung is targeting 20m smartphone sales worldwide this year and double that figure in 2011. Both forecasts are improvements on Samsung‟s original goal, articulated when it unveiled Galaxy S, when it said it would sell 18m this year. However, it is being slightly more cautious than in September, when it said 2010 would see 25m shipments, rather than the vaguer “more than 20m” of Shin's interview. By the end of 2011, however, the firm expects to have double-digit smartphone share, though still lower than its overall handset share of 20 per cent and rising.

It plans to have a far earlier start in tablets than it did in smartphones, where it missed the boat for the first couple of years and then launched an underwhelming Android device, the original Galaxy. In tablets, Samsung will use the same tactics to eat away at the iPad's lead as it has in smartphones.

Most importantly, these are control of key components, which gives it design flexibility and cost advantages; and a strategy of spreading the brand far and wide with many product variations to suit any user base. These two approaches, together with a hefty investment in marketing and carrier partnerships, have delivered 7 million unit sales of the Galaxy S family since its launch in July, 3 million in the US, where Samsung has particularly been associated with low-end models.

The battle with Apple

So far, much of the impact of the Galaxy S will have been felt by other Android vendors such as Motorola or Sony Ericsson, whose smartphone growth has been slower than Samsung's. However, Apple is starting to lose some ground to the Google platform too, and the Korean OEM's advantages make it the most dangerous of the Android OEMs to the iPhone.

It has even greater economies of scale and purchasing power than Apple does. Like Apple, it has a level of control of its supply chain that promises cost efficiency and design innovation. Ironically, its sister company Samsung Electronics, provides Apple's distinctive apps processor, the A4, which is almost the same as the Hummingbird it makes for Samsung Mobile. But both OEMs have powerful control over their processor evolution and its optimisation for their software platforms.

Both are also heavily focused on a differentiated touchscreen display. Samsung has Super AMOLED, a technology only currently made by another sister firm, Samsung Display, and for now exclusive to Galaxy and Wave. Apple, meanwhile, has responded to shortages in AMOLED technologies by touting the benefits of advanced LCD alternatives, and also has an exclusive screen, RetinaDisplay, made by Sony. (Not that either manufacturer is immune from the component shortages that have dogged handsets since the market recovered. Both say they would have sold more of their flagship smartphones if it were not for shortages, and Samsung has had problems getting sufficient Super AMOLED screens from its stablemate firm. "We're in a situation where we wish we had more supply," said US CMO Paul Golden.)

Design flexibility

If the two phonemakers are head-to-head in component terms, they are different in two important ways that will help define their success in future. First, Apple has a control over the direction of its software platform and user experience, which cannot quite be matched by a vendor relying on an open OS, however glossy the UI overlays and app stores it puts on top (though Samsung does have Apple-like grip on bada, which will be important in the growing mass market smartphone segment).

Second, Apple basically has one product. The iPhone design and user experience have been enhanced over its four generations but not changed radically, and the iPad is basically a stretch version.

This "take it or leave it" approach can only work for a supplier whose single platform is as beloved as that of Apple, but the vendor does run the risk of adapting too slowly should its product start to look like yesterday's news amid the waves of smartphone and tablet innovation. For instance, CEO Steve Jobs' vitriolic refusal to consider a 7-inch variation of the iPad suggests an unhealthy refusal to imagine that non-Apple formats could possibly be attractive – an attitude increasingly reminiscent of Microsoft at its most arrogant.

Next page: The tablet market

More about

TIP US OFF

Send us news


Other stories you might like