22 October 2016
Samsung's Galaxy S6 Edge (left) and Galaxy S6 smartphone device have received positive reviews since their launch in March. Photo: Bloomberg
Samsung's Galaxy S6 Edge (left) and Galaxy S6 smartphone device have received positive reviews since their launch in March. Photo: Bloomberg

Samsung may recoup top smartphone maker title on new releases

Investors are betting that Samsung Electronics is poised to recoup its title as the world’s top maker of smartphones.

The company’s market value has risen by US$12 billion since March 1, when it unveiled a pair of new handset models at the Mobile World Congress in Barcelona, showing that investors are upbeat on its prospects this year, Bloomberg News reported.

Apple has overtaken Samsung as the world’s biggest smartphone maker in the last quarter of 2014, selling 74.8 million units, compared with 73 million for the Korean giant,  according to market researcher Gartner.

But Samsung is expected to regain the lead with the sixth generation of its flagship Galaxy phone, along with the second edition of the Edge, a phone with a screen that curves along its length.

“We expect Samsung to regain its position as the world’s clear No. 1 by volume” in the first quarter of 2015, said Neil Mawston, executive director of Strategy Analytics.

Both Samsung devices have drawn positive reviews from market watchers, many of whom panned Galaxy’s previous iteration.

Tech-focused website CNET calls the S6 a “stunner” while the influential review site Wirecutter considers it the best Android premium handset.

“The market, carriers, and even consumers are all on the same page that Samsung’s new phone is different from the past models,” said Keon Han, a Seoul-based analyst at Credit Suisse Group.

Samsung will ship 49.8 million S6 phones this year, according to an average of eight analysts recently polled by Bloomberg, which would be an improvement on the performance of previous model but short of the high-water mark of more than 65 million set by the S3, which was released in 2012.

Samsung said earlier this month that its operating profit for the quarter ended on March 31 is likely slump 31 percent to 5.9 trillion won (US$5.4 billion).

Its second-quarter profit, which would include S6 sales for the full three months, may rise to 7.4 trillion won, from 7.2 trillion won a year earlier, according to analyst estimates compiled by Bloomberg.

Apple has been luring consumers away from Galaxy devices since it introduced the bigger iPhones in September.

To better compete, Samsung has upgraded the materials used in the body of the S6, phasing out plastic in favor of a combination of glass and metal, mirroring the look of other premium handsets, including the iPhone and the HTC One, Galaxy’s main competitor among high-end Android phones.

The S6 and the Edge also feature the latest generation of the Android operating system, called Lollipop, and are packed with Samsung’s most advanced parts, including its own processor and modem chips, as well as ultra-thin screens, all of which will help bolster profit margins at its component businesses, according to the news agency.

The new models also have a fingerprint reader that authenticates transactions on Samsung’s proprietary mobile payments software, the company’s answer to Apple Pay.

Mawston said the S6 will help shore up Samsung’s position in China and India, although he doubts an “instant major recovery” in those markets.

Competition from local rivals whittled the Korean group’s market share in China, the world’s largest mobile market, to 7.9 percent in the final quarter of 2014, from 18.8 percent a year earlier, according to figures compiled by researcher IDC.

Beijing-based Xiaomi rose to the top with a 13.7 percent market share, while Apple took second with 12.3 percent.

In India, Samsung is competing with local upstart Micromax for leadership in the world’s fastest-growing mobile market, and researchers are divided over which company is ahead.

Samsung also faces a test in the United States, where its market share slipped 7 percentage points to 21.1 percent, according to Strategy Analytics. Apple, meanwhile, racked up 3 additional points to close the year at 44.4 percent.

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