Samsung raises the stakes even higher with S IV

Thursday night will see one of the biggest product launches in the history of the technology. Samsung’s new flagship phone, expected to be called the Samsung Galaxy S IV, has already been declared the new all-things-to-all-people smartphone, further dethroning the faltering Apple iPhone 5 even before the S IV is unveiled.

It’s easy to see why so much is expected of it: the current top-of-the-pile, the Galaxy S III, was declared by many (including this column) the 2012 phone of the year. Its successor, due out as much as six months before the next iPhone, will rule the roost by default.

As a result, many will see the phone market as a war between the S IV and the iPhone 5, with the Sony Xperia Z and BlackBerry Z10 scrapping with each other for the number three position, the Nokia Lumia 920 fighting for the scraps, and the Huawei Ascend P2 as the dark horse.

But that is only the top end of the market, where the flagship phones play. While these phones also represent the highest profits on phones, and shape market perceptions, to take them as the whole would be a massive misreading of the cellphone market.

For one thing, the Galaxy S III remains, for now, the most popular high-end phone in the world, as well as in South Africa. By mid-January, it had sold 40-million units, making it Samsung’s best-selling phone yet. Now, for the first time, sales figures for South Africa and the rest of Africa have been revealed.

 

 

According to George Ferreira, chief operating officer and vice-president of Samsung Electronics Africa, it has sold 200 000 units in South Africa since June 2012. In the rest of Africa, it has sold close to 400 000. Nigeria, Ghana and Kenya are the main markets for the device outside South Africa, but strong sales – in the tens of thousands – have also been seen in Tanzania, Angola, Uganda, Senegal, Namibia, Botswana and Mauritius.

The phone thus provides the first evidence that developing markets also have a strong appetite for top-of-the-range phones. It also suggests that, once the S IV arrives and the price of the S III drops, the latter will continue to sell.

If it were Samsung’s only play, though, the next big thing and the next big marketing budget could quickly knock it off its pedestal.

Quiet takeover
​The underlying reality is that Samsung has quietly taken over the Android market at every smartphone price level. In the last two years, it has sold close to 1,4-million Android devices in South Africa, almost unobtrusively moving past the 10% mark in smartphone market share. It claims around 95% of the local Android market, with the Sony Xperia range making up the rest.

The biggest contributor to these sales is one of the cheapest Android phones on the market, the Galaxy Pocket, which sells for less than R900. Between the low and high end, the new Galaxy mini, selling at around R3 000, neatly slots into the space previously dominated by the BlackBerry Curve.

Even the Galaxy Note – a cross between a small tablet and a large smartphone, dubbed a “phablet” – has surprised the local market, with close to 120 000 units of the Note 1 and 2 sold. At initial launch, it was derided as being too big for a phone and too small for a tablet. Worldwide, Samsung has had the last laugh thanks to selling well over 10-million Notes.

And all of that before the launch that will keep the tech world holding its breath on March 14. The event, which will all but close down New York City, will naturally be a triumph of marketing budget over substance. However, Samsung is expected to announce more than just the phone, and we can expect to hear about an evolved and expanded Samsung ecosystem, to take on the iOS universe that had been one of the keys to Apple’s technology leadership.

That strategy will be critical to Samsung’s long-term success, if it wants to avoid being dethroned by the next big phone.

Ferreira concurs.

“I’ve not seen true loyalty in any smartphone brand where people will stay 100% on a brand unless they get value,” he says. “But I do see that loyalty in an operating system. If they like Android, and it keeps giving them what they want, they will stay with it. People become loyal to an ecosystem.”

On Thursday night, we will discover just how well such loyalty is to be rewarded.

Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget. Follow him on Twitter on @art2gee

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