Boom or bust?

The Galaxy S is Samsung Electronics’ latest attempt to provide an “iPhone killer,” although the company hopes that its newest device will perform better than its predecessors, which flopped. / Korea Times

Samsung's go-to-smartphone garnering mixed reviews in US

By Kim Yoo-chul
Korea Times correspondent

ANAHEIM, Calif. ― Samsung Electronics has launched a massive campaign to promote its brand-new smartphone, the Galaxy S, and obviously, a breakthrough in the U.S. market would be a precondition for global success.

A mixed response from American consumers, however, appears to have the Korean technology giant equally inspired and concerned.

Samsung is the world's No. 2 mobile phone vendor behind Nokia, but in the lucrative market for smartphones, which provide larger margins than conventional handsets, the company is among the also-rans.

Samsung has been criticized for its lack of urgency in advancing its smartphone offerings, but in the Galaxy S, the company believes it finally has a device intriguing enough to compete with the iPhone 4, the latest version of Apple's do-it-all smartphone.

Yet industry watchers believe Samsung

Shin Jong-kyun President of Samsung’s mobile division

needs more time to ripen its smartphone reputation in the U.S. market dominated by iPhones and BlackBerries.

The Galaxy S is clearly among the most powerful devices run on the Google-backed Android operating system, which many consider as the best bet to challenge Apple’s supremacy in consumer smartphones, but it remains to be seen if the device will pass the coolness test of American consumers.

The lack of exposure won't be an issue, however, with Samsung providing the Galaxy S to all of the top six U.S. carriers, including AT&T, which also has iPhone among its arsenal.

"The expectations for the new Samsung phone have been significant here, and we are getting a lot of inquiries. That said, iPhones are clearly selling more here," said an agent at a T-Mobile store in Torrance, California, last week.

The Samsung Vibrant, a variable of the Galaxy S, will be launched through T-Mobile from July 21.

The Galaxy S has had a bright start in Asian countries, including Samsung’s home-turf of South Korea, where more than 200,000 were sold in the first 10 days after its release.

The U.S. market, however, will be tougher to crack.

Although Samsung smartphones are being increasingly noticed among U.S. consumers, the ability to steadily provide sleek and powerful devices such as the Galaxy S will be crucial for the company to have a shot at competing within the Apple fandom, said the T-Mobile agent.

An employee at an AT&T store in Torrance believed that Samsung's marketing blitz for the Galaxy S has been successfully generating a buzz, which may allow the company to see impressive short-term results.

AT&T will provide the Samsung Captive, another from the Galaxy S series, starting July 18. Consumers can pick up the device for $199.99 on a two-year contract and a minimum $15 per month data plan.

In the view of the AT&T sales agent, the Galaxy S's hardware specifications compare evenly against that of the iPhone 4’s.

"I see the biggest difference between the Galaxy and iPhone 4 is that Samsung uses internal memory, while the iPhone 4 has an external memory," he said.

Another marketing official at the Best Buy electronics store in Moreno Beach Plaza said Samsung’s chances for establishing a strong reputation for smartphones will hang on its ability to consistently generate interest.

Samsung's reputation in mobile devices thus far has been "good, but not great." Perhaps, this is related to the overall view of the company as the backer of many technology movements, but a leader of none.

"I would say the Samsung Galaxy has so far been receiving mixed expectations from some early adopters. The timing of the launch was acceptable as Samsung uses Android as the benchmark platform. But I’m not sure about their sustainable impact," he said.

"It's debatable which (Galaxy and iPhone 4) is better in terms of technologies. But for me, Samsung has competitive display technology."

The Galaxy S features a 4-inch ``super’’ active matrix organic light-emitting diode (AMOLED) display, which boasts better touch sensitivity, wider viewing angles and is less reflective.

The phone is powered by a 1-gigahertz processor, which allows for a smooth experience in viewing high resolution videos.

Reason for optimism

Despite the uphill battle ahead, Samsung has found reasons to be confident about its smarpthone future.

One of them is the increasing popularity of Android-powered devices in the U.S. market, and Samsung appears to have a real shot at establishing itself as the standout maker among the herd of handset vendors flocking to the Android platform.

Smartphones work more like handheld computers than conventional phones, but the letdown for consumers has been that they are priced liked computers too.

Samsung believes that its sheer size in the handset business and dual strength in finished products and parts, which include memory chips and displays, will allow it to provide premium phones at a lower price than the comparable devices of its competitors, allowing it to establish a crucial edge.

Market research firm comScore says the market share of the Android operating system on handsets rose to 13 percent in U.S. in May from 9 percent in February, while Apple's operating system had a 24.4 percent share. The BlackBerry platform remains the leader in smartphone operating systems in the U.S.

As Samsung looks to flex its muscles in the U.S., Apple is attempting to cement its lead, and there are rumors that the company will go multi-carrier for iPhone 4, with Verizon Wireless considered a possible destination.

Technology experts believe that Samsung's smartphone strategies are gaining pace and purpose.

"Samsung's strengthened push for smartphones will undoubtedly be benefited by Apple's public relations trouble regarding the reception problems of the iPhone 4," said Kim Hong-shik, an analyst at NH Securities.

Shin Jong-kyun, president of Samsung’s mobile business, said the Galaxy has so far sold over 1 million handsets globally in the first three weeks of its release and offered bullish expectations for the U.S. market.

"Samsung will add more devices to its Galaxy series of smartphones in the upcoming quarters. We will also add more devices to our own operating system, 'Bada,' and offer Windows Mobile smartphones as well," he said.

Shin also says that Samsung will introduce a completely new smartphone series sometime during next year, although declining to elaborate.

Samsung, which expects the global demand for smartphones to reach 260 million units in 2010, hopes to sell 10 million Galaxy handsets by as early as October.

The company also wants to double its current smartphone share and end the year at 8 percent.

Samsung's Galaxy series of smartphones are currently provided to 100 carriers globally.