| SAN FRANCISCO, March 15
SAN FRANCISCO, March 15 Samsung's
newest, feature-packed Galaxy S4 may put pressure on Apple Inc
to accelerate its pace of smartphone design and venture
into cheaper devices - both departures from usual practice.
The latest Galaxy, unwrapped with much fanfare in New York
on Thursday, out-does the iPhone in most technical aspects. But
the challenges it encapsulates run deeper than just a simple
"It would be overstatement to say Apple is far behind,"
Charles Golvin, analyst with Forrester, said, but it does need
to note the quickening pace of competitive devices being
"If anything, what Apple needs to respond to is the cadence
of their own releases, probably a completely new design every
two years and a sort of speed bump every year is not an adequate
cadence for Apple to remain at the forefront of smartphone
Samsung's apparent ability to go toe-to-toe with Apple on
cutting-edge smartphones may prompt the U.S. titan to finally
make its own assault on the lower-end of the market that it has
famously stayed away from -- not least to get into untapped
markets like China and India.
Many analysts now say Apple has to respond in force to
Samsung and other rivals that are grabbing attention. Much
of Wall Street is now looking ahead to the next iPhone, but
expectations are muted.
Once the darling of Wall Street, Apple has in six months
seen its shares fall 30 percent from a high of $705. Its Maps
software was panned for inaccuracies; its once-reliable
financial results, that rarely failed to surpass Wall Street
estimates, missed analysts' expectations.
IN A RUT
Apple appears stuck in an iPhone product cycle, with a new
phone typically launched in the second half. In past years, the
iPhone has gotten a complete redesign only every two years.
Brian White, analyst with Topeka Capital Markets, who views
the Samsung Galaxy S4 as a refresh and "not a game changer,"
said smartphone technology is now improving so fast that
timetables put Apple at a disadvantage.
More importantly, White said, Apple needs to broaden its
portfolio and play in more smartphone categories as the high-end
market could soon be saturated, and get into new categories such
as the oft-rumored television or a smart watch.
"They have all the components of the magic potion, which is
the hardware-software ecosystem," he said. "All they need to do
is take that potion and put it in a different segment of the
While many on Wall Street believe the quickest way to
penetrate fast-growing markets like India and China is a cheaper
iPhone, the risk is that a cheap iPhone would cannibalize demand
for the premium version and eat into Apple's peerless margins.
Apple's vice-like grip on its ecosystem - with the closely
managed app store and its seamless integration with the hardware
- is still seen as its biggest strength, one that Samsung is
trying to emulate with a larger investment in software and
connectivity. The Korean giant is also emphasizing its own
mobile "Samsung Hub" rather than the Google Play store that most
other Android adopters point to.
The iPhone has seen its sales increase to 125 million in
fiscal 2012 from 40 million in fiscal 2010. But in 2012, Samsung
became the No.1 in the global smartphone market with 30.3
percent share followed by Apple with 19 percent share.
Samsung's rapid rise is partly helped by the fact that it
bombards the market with close to 40 versions tweaked for
regional and consumer tastes, from high-end to cheaper models.
Samsung's momentum is a major issue for Apple, Ben Reitzes,
analyst with Barclays, who is expecting Apple to launch a
lower-end iPhone globally this summer.
Apple declined to comment on Friday. But a day before
Samsung's launch, marketing chief Phil Schiller attacked
Google's Android operating system, saying that the majority of
its users were stuck on older versions. He also said Apple's
internal research showed four times as many consumers were
switching to iOS from Android than vice versa.