Can Samsung be cooler than Apple?
By Kim Yoo-chul
However, what the Korean company really wants is to be admired, and by successfully injecting creative input into its smart products in recent years, it finally seems to be earning its stripes as an innovator.
The main source of inspiration in the technology industry in recent years has been Apple, the maker of the revolutionary iPhones and iPads and Samsung’s bitter industry rival.
But it now seems that Samsung is also beginning to generate excitement ahead of product releases these days.
Its products have been seen as high quality but safe, an approach the management had defended as a fast-follower strategy. The company is now investing Herculean efforts to be more daring.
Its executives met reporters on the sidelines of the Consumer Electronics Show (CES) in Las Vegas earlier this month and talked about smartphones that could bend and be built around advanced organic light emitting diode (OLED) screens that provide stunning pictures with lower power consumption.
Long gone are the days when Samsung was considered as the poor man’s Sony.
A recent Boston Consulting Group (BCG) survey ranked the Korean firm third among global companies in innovation after Apple and Google. InterBrand, another global consultancy, has named Samsung the world’s ninth-most valuable brand overall.
''Samsung’s transition to smartphones with flexible and unbreakable screens is an important development that will likely take place within the year,’’ Fitch Ratings said to clients in its latest internal analysis.
The exploding market for mobile devices has quickly turned into a duopoly between Samsung and Apple.
The American company has been uneasy about the ascent of its rival, evidenced by the lawsuit it has brought against Samsung in several countries since last year, accusing it of selling copycat products.
In terms of volume, Samsung has already edged Apple in the smartphone market and it seems that Apple is being increasingly pressured to adjust it strategies to its main competitor, not the other way around.
It was Samsung that has been pushing the trend of larger screens for smartphones and the expanded display of iPhone 5 represents an adjustment.
Some industry officials believe that the strengthening market presence of Samsung may force Apple to introduce new products quicker than its current once-a-year pace.
Fitch expects Apple to launch a cheaper iPhone later this year and the shift will reduce Samsung’s profit.
However, Fitch expects that Samsung, which had a 32 percent share of the global smartphone market in the third quarter of 2012, twice that of Apple’s 16 percent, will likely widen the gap with its rival, thanks to a broader lineup of devices that target different markets.
Samsung plans to sell a record 510 million phones this year with smartphone sales reaching 390 million, The Korea Times has learned. The company has high expectations for its upcoming Galaxy S IV and Galaxy Note III handsets.
Microsoft, Huawei, ZTE and Sony are among firms also involved in designing and manufacturing flexible OLED screens. But its agreed that Samsung is closest to manage mass producing them.
The transition toward OLED screens could force Apple’s hand as well, when the iPhone 5, which uses liquid crystal display (LCD), has failed to impress in terms of battery power.
''Apple is no longer the sole innovative force in the market and Samsung is garnering just as much attention and influencing technology just as much. That’s why we believe the iPhone maker will drop its traditional one-product-a-year strategy and put more focus on earnings and revenue,’’ said leading local consultancy RoA Consulting,.
''Late Apple co-founder Steve Jobs was negative about outlook of Samsung’s 7-inch tablet. But Apple is now aggressive about pushing tablets of the same size. Meanwhile, Apple is accelerating its efforts to commercialize iTV, an area where it will find Samsung as the player to beat.’’
No trouble in parts sourcing
Samsung’s edge over Apple lies in its dual strengths in parts and finished products.
Apple will occasionally struggle to meet its production targets due to inconsistent supply from partners in Taiwan and Japan. Samsung is rarely in that situation.
The dispute over intellectual property has Apple doubling its efforts to reduce reliance on Samsung’s screens and chips. However, the Korean firm still provides the key iPhone and iPad parts.
Samsung believes that its expanding business with rising manufacturers from China, including Huawei, TCL and ZTE, will compensate for the drop in orders from Apple.
At the CES, Samsung announced its eight-core processor, the Exynos 5, which is far better than the current quad-core processors, and company officials say the announcement was aimed at showing strong prowess in chip-making development.
''Samsung’s business portfolio is ideally positioned. It can roll out diversified products while it has no problems to put money earned from smartphones into future and advanced parts technology,’’ said a senior fund manager from a U.S.-based investment bank by telephone.
He believes Samsung shares will rise to over 2 million won in the third quarter of this year.