After the enormous success of the Galaxy S3, Samsung (NASDAQOTH: SSNLF) is ready to take another shot at Apple Inc. (NASDAQ:AAPL) on its home turf by launching the new Galaxy S4. This is the first time ever Samsung is launching a flagship product first in the U.S. This clearly suggests Samsung’s growing interest in targeting the high-end, premium market in the smart phone space.
Nonetheless, after the success of the Galaxy S3, Samsung is sticking to the basics by not making any radical changes to the new device. Instead the changes are incremental, thus the phone looks fairly similar to Galaxy S3. The changes primarily exist in the battery and the processor that enhance the entire experience, however, the physical appearance remains the same.
Breaking new ground
Samsung’s strategy to deluge the market has been extremely successful so far. During the first quarter of 2012, Samsung gained massive lead on a global scale in the smart phone space. Relative to Apple Inc. (NASDAQ:AAPL), which possesses a 19% market share, Samsung has a staggering 30% market share globally.
Samsung’s lead in the smartphone space is driven largely by a huge number of cheap Android-based phones launched in emerging markets. However, Samsung’s success in the low end was expected, considering the size and the reach of the South Korean giant.
What was relatively new and unexpected is the challenge posed to Apple in the high-end segment of smart phones. The Galaxy S3 saw phenomenal success last year, as it sold as many units as Apple’s iPhone 5 or 4S collectively in the final two quarters of 2012.
Furthermore, it is imperative to emphasize that Galaxy series is only a third generation product, relative to Apple’s iPhone 5 which is the so called fifth generation “marvel”. The success of the Galaxy S3 only indicates the globally growing demand for Samsung, and its arrival in the high-end segment of smartphones.
The fallen player
Other than Apple Inc. (NASDAQ:AAPL), Samsung also competes with Research In Motion Ltd (NASDAQ:BBRY) in the high-end smart phone space. The smartphone space seems to be getting interesting by the day, with Samsung’s arrival and BlackBerry’s revival.
It is well known that the smartphone space was once dominated by BlackBerry. Recently, BlackBerry launched the all new Research In Motion Ltd (NASDAQ:BBRY) 10 in the U.S., which is largely considered to be the most attractive smartphone market in the world.
BlackBerry had lost considerable ground to Apple and Samsung due to negative company perception and lack of innovation. However, with the launch of BlackBerry 10 it will hope to regain some of its lost pride, and re-establish itself in the biggest smartphone market. Going forward, the success or failure of BlackBerry 10 in the U.S. may determine the stock’s direction. Success in the U.S. usually transcends into other international markets, as it confirms consumer confidence.
Several U.S.-based carriers have exhibited interest in carrying the all new BlackBerry Z10. Thus, BlackBerry’s revival looks very likely, however if it can gather momentum and capture market share from Apple, and now Samsung, still remains to be seen.
Where is Samsung relative to Apple Inc. (NASDAQ:AAPL)?
Samsung, last year, exhibited its ability to compete with Apple in the high-end segment of smartphones. However, it is still playing catch up to Apple in the high-end market as the Galaxy S3 sold lesser units than the iPhone 4S during the final quarter of 2012.
Considering that the 4S is an older variant of iPhone, and still ended up selling more units, Samsung must be prepared to throw the kitchen sink at Apple in order to compete with it in the higher segment. The difference in sales was not a staggering one, and going forward Samsung will expect S4 to catch up at some point.
Nevertheless, the lack of any radical developments in the new phone may not be a highly attractive proposition for the current S3 users. It is important to identify and question, if Samsung plans to attract current S3 users into switching to S4, who already have a 2 year contract, or offer an upgrade to users that use an older generation of Samsung.
Research In Motion Ltd (NASDAQ:BBRY)‘s last stand
It is essential to mention BlackBerry in the mix of this ongoing high-end smartphone battle. BlackBerry’s market share fell from 3% in 2011 to an all-time low of 1.8% during 2012. Early Research In Motion Ltd (NASDAQ:BBRY) 10 adopters are expected to be loyal BlackBerry fans, which primarily are the existing users. Going forward, BlackBerry 10’s success will depend heavily on how many current Android and iPhone users make a switch to BlackBerry.
I don’t expect BlackBerry to dominate the smart phone space as it once did, however, if it manages to take back some of its lost market share from Apple Inc. (NASDAQ:AAPL) and Samsung, then we may witness an upside in its stock price.
The takeaway
In any case, Research In Motion Ltd (NASDAQ:BBRY), and Samsung are set to challenge Apple’s dominance in the high-end smartphone market. Constant innovation and coming up with radically disruptive technology is the only way for both, if they expect to grind out a lead over Apple in this segment.
The article The High-End Smartphone Space Takes an Interesting Turn originally appeared on Fool.com and is written by Ashit Gulati.
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