Samsung Galaxy v Apple iPhone - the smartphone duopoly

 

Rory Cellan-Jones and CCS Insight's Ben Wood assess Samsung's new Galaxy phone

The excitement has been mounting for weeks. Fans have speculated about the precise specifications of the device, the company behind it has been doing everything it can to preserve the mystery and build up the anticipation. Yes, Samsung has learned quite a lot from Apple about the art of hype.

I've been to several major gadget launches - the original iPhone, Sony's PlayStation 3, Microsoft's Xbox Kinect - and last night's unveiling of the Galaxy S3 smartphone in London's Earl's Court may well have been the most over the top and extravagant yet. In the cavernous halls where everyone from Pink Floyd to Madonna has strutted their stuff, thousands gathered to see a rectangular slab of plastic and metal.

Why? Because only one smartphone has challenged - perhaps surpassed - the iPhone in terms of sales, technology and consumer appeal. And the latest version will undoubtedly set the standard for Apple and the rest of the industry to try to match.

For all the extravagant talk of a device which allows you to "live the life extraordinary", the latest Galaxy looks at first sight like any other modern touchscreen phone. It does have a bigger sharper screen than its predecessor, and some clever touches. There's a voice recognition function which seemed in the demo to do everything that Apple's Siri does and more, there's eye-tracking technology which means that the phone goes to sleep when you stop looking at it, and there's NFC (Near Field Communication) built in, allowing users to simply tap each other's phones to share content.

But at its heart is the latest Ice Cream Sandwich version of the Android operating system - and that's on plenty of other impressive phones from the likes of HTC, LG and Sony. Why the new Galaxy matters is that the previous models have established it in consumer minds as the number one Android phone - and in this business, it's increasingly apparent that the winner takes all.

Image of mobile phones Could there soon be only two players left standing?

Look across the wider smartphone battlefield, and it seems that there could soon be just two players left standing. Last week Apple revealed that it had sold 35 million iPhones in the last quarter, a figure that left industry analysts gasping for breath. Only for them to suffer another fainting fit on learning that Samsung had sold more than 44 million smartphones in the same period. With the Korean firm's cheaper phones also roaring ahead, it has now overtaken Nokia as the world's biggest mobile maker.

But what is truly astonishing is the share of industry profits these two companies are winning. Look at this infographic of recent profit trends in mobile phones, compiled by a respected mobile industry analyst, Horace Dediu.

It shows that Apple captured 73% of phone industry profits over the last three months, with Samsung getting 26%. HTC got 1% and the rest made losses, or profits so small they barely register.

From the mobile operators' point of view this emerging duopoly must be deeply worrying. Having been forced to bend to Apple's will, they were very happy to see the emergence of Android, with its promise of a multitude of manufacturers competing for their attention. Now it looks as though Samsung is in position to call all the shots in the Android market.

What happens next? Could RIM, which has been previewing its new Blackberry 10 system this week, make a comeback in the autumn with innovative phones that revive its appeal? Will Nokia's Lumia range - apparently doing reasonably well in the United States - pull the Finnish giant out of its death spiral? Or will a Chinese giant like Huawei start flexing its muscles in Western markets?

The mobile networks will hope that all of those eventualities - however unlikely - come to pass. But in the meantime, they will all be helping Samsung with its massive marketing push behind the Galaxy S3 - and making it into an inevitable and very profitable hit.

 
Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this
    0

    Comment number 16.

    Good to see that Samsung are outclassing Apple. However what's sad is the consumers need to be "wooed" by this launch party nonsense and told what to buy like sheep.

    There are plenty of iPhone beaters out there, The Sony Xperia S, the HTC One, and no doubt plenty others too.

  • rate this
    0

    Comment number 15.

    I am currently an iPhone 4 owner and Apple have lost ground in this very competitive market due to the fact that they didn't release a bigger and better phone. Nothing much changed from the Iphone 4 to the 4s. Now Samsung have took their time but have made a better, faster phone this time. I think most of Apple customers will either buy this new phone, or await their (hopefully) new iPhone 5.

  • rate this
    +3

    Comment number 14.

    I switched from an old iphone 3 to Samsung Gallaxy II a few months ago - I considered the iphone 4S but couldn't see anything in terms of 'features' where it would be better than the Samsung. For me it is about price vs performance - my phone was free on a 2 year line retal at £21, the iphone was coming in at £35ish for nothing extra - simples!

  • rate this
    +1

    Comment number 13.

    If Samsung want to sell more of their phones all they have to do is keep the price realistic and not charge what they think they can get away with charging, like Apple. Simple.

    Apple is one of those occasional exceptions to the rule - in its case it's definitely a case of you DON'T get what you pay for.

  • rate this
    +3

    Comment number 12.

    BluesBerry, I have no idea, but last week I was in a major high street phone shop and heard a young girl, she wasn't any more than maybe 17, getting talked into signing up for a £41 a month contract, just to get an iPhone! It constantly amazes me how many youngsters are walking around with £400/£500+ mobile phones.

    The phrase about cost of everything and value of nothing springs to mind.....

  • rate this
    +2

    Comment number 11.

    Re: 9 - Graphis.

    It's not as simple as that. People "invest" in Android or IOS.
    Once you use an Android phone you have all your contacts stored in the Cloud, you use the apps, gmail etc. This is all integrated into the user experience. The same is true for iPhone users.
    For many users this makes switching more than just a cost based decision.

  • rate this
    +5

    Comment number 10.

    9 Graphis

    I can afford an iPhone: I didn't get one. I reckon it's a little more subtle than that. People look for a phone whose attribute bundle best suits their needs and wants, rather than simply throwing all their money at the most expensive one they can afford.

  • rate this
    -4

    Comment number 9.

    It seems to me most people make their initial choice of phone on price: if they can afford an iPhone, they get one. If they can't, they then make subsequent decisions based on features. If the Galaxy S3 remains cheaper than iPhone, then Samsung will do very well. But if it creeps closer in price to the iPhone, then many will simply see little difference and opt for the iPhone.

  • rate this
    +1

    Comment number 8.

    Dear Jason, please go to: http://www.bbc.co.uk/news/technology-17945853

    And read:

    For the company's bottom line that hardly matters. After all, most of Apple's products could quite as well carry the label "Samsung inside", with the South Korean firm providing most of the key hardware components in Apple's mobile devices.

    Where would Apple be without Samsung?
    2 cans and a string? :)

  • rate this
    -6

    Comment number 7.

    I don’t see anything that would make me rush out and buy one, more of an evolution from Samsung rather than a revolution. At the end of the day Samsung and Google have simply copied a format that Apple have pretty much Invented, but made it look cheaper and slightly more awkward to use.

  • rate this
    +1

    Comment number 6.

    mark-dj Messy and user-unfriendly? Have you ever used an Android device recently? Strange thing to say. Windows phone is excellent though.

  • rate this
    0

    Comment number 5.

    It simply amazes me that any company can make one little tweak to smartphone, and a huge crowd will flock to buy it (discard it) and then buy yet another gadget. Austerity?
    Where are these folk getting the money from, and is there nothing better to spend it on than "ME", as in the ME-generation?

  • rate this
    -2

    Comment number 4.

    The operators aren't that worried.

    They're losing profits hand over fist selling the iPhone, which is why they push Androids. And why Samsungs are selling so well - and Samsung knows it.

    And if Androids become more expensive because Samsung gets ahead of itself, they'll just push some other phone.

    The operators always rule and will until we no longer need cell towers.

  • rate this
    +3

    Comment number 3.

    I can't see what all the fuss is about, if you open up an IPhone and look inside - you've got a Samsung!!!

  • rate this
    -3

    Comment number 2.

    It's funny how things turn out with a bit of spin and luck...I am simply amazed at how Android has become so popular for low, and mid-end devices, judging how messy and user-unfriendly it can be.

    Don't get me wrong, Android is powerful and great but something like Windows Phone is far easier to use for the average low-end non-techy user, and is just not getting market traction in the UK

  • rate this
    +5

    Comment number 1.

    I'd have thought it would be a tad hypocritical for the mobile operators to worry about the lack of hardware choice. The consumer hardly has a huge choice of mobile operators, and their oligopoly is protected by higher structural barriers than the hardware market.

 

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