How will patent feud unfold in 2013?

Samsung growing confident in showdown with Apple

By Kim Yoo-chul

Samsung’s Galaxy SIII

Apple’s iPhone 5

The year 2012 will be remembered as the time when the exploding global market for mobile Internet devices like smartphones and touch-screen tablets boiled down to a duopoly between Samsung Electronics and Apple.

Samsung hopes to use the New Year to gain the upper hand in the showdown of technology giants.

Samsung, the world’s largest maker of mobile phones, televisions and computer memory chips, is considered the only serious challenger to Apple’s supremacy in consumer mobile devices.

While the Korean company has already trounced its California-based rival in volume thanks to its vast lineup of handsets, it could be said that Apple still holds the nuclear bombs in the immensely popular iPhones and iPads.

Officials at Samsung insist that this will be the year when the country’s influence begins to catch up to its sales total.

The company is inspired by the global buzz created by its two most recent smartphones, Galaxy Note 2 and Galaxy S3, and vows to follow with new devices that ace the coolness test.

A reputation for innovation is critical for Samsung as it finds itself entangled in a complicated web of intellectual property disputes with Apple, which fired its first lawsuit in the United States early last year, accusing its Korean rival of ``slavishly’’ copying the look and feel of iPhones and iPads.

``Obviously, 2012 was a milestone year for us as we edged over Nokia as the world’s largest handset maker and solidified ourselves as a force to be reckoned with in smartphones and tablets. Of course, our legal battles with Apple were critical as well,’’ said a senior Samsung executive.

``I think this is the year when we begin to earn respect that fits our status as the world’s top maker of mobile devices.’’

Samsung plans to sell a record 510 million handsets this year, about one-third of them smartphones. While the market presence of iPhones is still significant, Samsung’s advantage in output, pricing and delivery is beginning to shine, according to market analysts.

UBS analyst Steve Milunovich recently trimmed his target on Apple shares to $700 from his previous $780. He predicted Apple to miss its sales target on iPhones by five million units in fiscal 2012.

Kim Ji-san, an analyst at Seoul’s Kium Securities, agreed.

``Apple will further lose its grip on the global smartphone market as the rules of the game will increasingly shift to speed, economy of scale and costs. As the flag carrier of the Google-backed Android mobile platform, Samsung is beginning to duplicate Apple’s strength in software and content ecosystem,’’ Kim said.

Kim stressed Samsung is ideally positioned to increase its global market share in smartphones this year thanks to its strength in supply chain management (SCM) capability and growing presence in emerging markets.

Data from Strategy Analytics (SA) showed Samsung grabbed 35.2 percent share in the global smartphone market for the first nine months of 2012, followed by Apple with 16.6 percent after the Korean company hugely sold its Galaxy line of devices.

While Samsung produces both finished products and parts, Apple sources components from manufacturing partners in Taiwan, China and Korea.

``As manufacturers are racing to roll out devices increasingly earlier, manufacturing and supply chain management are once again important factors. Innovation and market specification can only carry you so far. Samsung’s traditional strengths are shining again,’’ said Park Young-joo, a senior analyst at Woori Investment & Securities.

Park believes that the popularity of the iPhone 5 will be less than expected in markets like China due to its high price and instability in volume of devices delivered.

And while Apple still insists on keeping a one-year gap between the releases of new products, Samsung is introducing new devices at a quicker pace.

``We believe iPhone 5S will be released either in August or September this year. Samsung will roll out Galaxy S4 and Galaxy Note 3 in April and August this year, respectively, sending it to expand the global smartphone share to late 30 percent,’’ said Park.

Samsung mobile chief Shin Jong-kyun will meet the Korean media on the sidelines of his participation at an upcoming International Consumer Electronics Show (ICES) from early January in the U.S. desert city of Las Vegas.

Shin will respond to several pending questions, according to Samsung officials.