Markets less enthusiastic about iPhone 4S

Samsung to seek iPhone 4S ban in Europe

By Yoon Ja-young

An upgraded version of the iPhone 4, instead of the long-anticipated iPhone 5, was more than a disappointment for those waiting with bated breath. The reaction in the industry, meanwhile, was mixed, depending on their devotion to Apple.

“Seeing the presentation falling short of expectation, I think Apple will fall sooner than expected after (the absence of) Steve Jobs. It was worth nothing more than a statement in writing,” a Twitterer said.

Samsung Electronics CEO Choi Gee-sung also said “It is disappointing,” when reporters asked him about the latest iPhone 4S unveiled by Apple.

Samsung Electronics announced it would file patent infringement lawsuits against the new phone in France and Italy, to ban its sales there. It said the new iPhone seriously violated patents related with WCDMA technology.

The iPhone 4S has a processor upgraded to dual core A5, 8 megapixel camera, and is equipped with iOS5, the latest operating system of Apple which includes iCloud, Apple’s cloud service, and iMessage, a messenger service. This slightly improved version of the iPhone 4 fell short of consumer expectations demanding startling and impressive design and technological advancement.

Cho Jin-ho, an analyst at SK Securities, said the iPhone 4S would have only a limited effect on Samsung Electronics. “With the delay of the iPhone 5, the boom of the premium Galaxy S2 will continue. The low-end smartphone lineup below $200 that can compete with the iPhone 4S will expand in the fourth quarter. As Samsung enjoys abundant volume, the negative impact on the profitability following price competition will be minimal,” he said.

The analyst, meanwhile, said the new phone is worse news for LG Electronics as the price competition will get fierce among low-end smartphones.

LTE phones to lead the market

Reaction differed among local mobile carriers depending on their smartphone lineup.

LG Uplus, the smallest mobile carrier, was happy that Apple delayed the release of the iPhone 5. As it uses a different bandwidth, it can’t offer iPhones to consumers.

“We would have been affected if the iPhone 5 was released. Apple fans and early adopters awaited the high-end phone, but it turned out to be just an upgraded version,” a representative for LG Uplus said.

She added that the fourth-generation (4G), long-term evolution (LTE) phones have better specifications than the iPhone 4S. “Some of them will switch to iPhone 4S, and some will wait for iPhone 5. Most of the smartphone users, however, are nearing the end of their two-year contract, the time to easily switch to a new phone. As they don’t know when the iPhone 5 will be released, they are very likely to turn to LTE,” she said.

SK Telecom, the biggest mobile carrier, also expects LTE to lead in the market. “Not only local but foreign manufacturers are releasing LTE phones in a premium lineup. 3G phones are likely to be low-end phones, but local consumers have been sticking to premium phones. As a result, the LTE phones are likely to lead in the market,” a representative for SK Telecom said. He added that it will focus on selling LTE phones for a while.

KT’s official comment was, “We are discussing with Apple over when to release the iPhone 4S, and we will notify the public as soon as we confirm a date.”

Undeniably, KT is more than disappointed over the delay. As the sole supplier of the popular iPhone here until early this year, KT was inarguably the biggest benefactor of the iPhone boom here. It even succeeded in pulling up its share in the stagnant telecommunications market.

In LTE competition, meanwhile, KT is lagging behind as the regulator hasn’t allowed it to scrap the unprofitable 2G services yet in order to use the 2G network for LTE service.

Hopefully for KT, it will take some time before users fully take advantage of the LTE service of other carriers. Neither SK Telecom nor LG Uplus has set up a nationwide LTE network yet. Moreover, the rate is burdensome for users. Mobile carriers aren’t providing the unlimited data scheme they did with 3G services, either.

Some expect it will be as late as the middle of next year before users massively switch to LTE phones. In that case, KT has time to prepare.