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Is smartphone market reaching saturation?

Samsung Electronics Comp., Ltd. (KSC:005930)) must know a thing or two now about how its archrival Apple, Inc. (AAPL) has been feeling.  Apple's stock recently slipped back under $400, in the midst of a stall in unit sales.  Overall Apple's shares remain down over 40 percent from their peak of $705 USD last September.

I. Profit Miss, Unit Sales Slowdown Hit Samsung Shares Hard

But the situation for Samsung isn't looking much better.  Samsung missed on profit expectations, according to a forecast of sales projections for the second calendar quarter of 2013 late this week.  Profit still set a record at 9.5T won ($8.3B USD), but that's less than the 10.2T won ($8.9B USD) 43 analysts polled by Thomson Reuters I/B/E/S hoped for, on average

Samsung remains the king of unit sales, but its profit margins and flagship smartphone sales weren't as strong as analysts were hoping for.

The misses drove Samsung into a nearly 4 percent drop in share prices amid an early Friday selloff.  That's on top of a 13 percent drop in June following analyst downgrades.

Samsung Galaxy S IV

News giant Yonhap, in Samsung's home country of South Korea, is reporting [Korean] that sales of Samsung's Galaxy S IV have hit 20 million.  That may sound impressive, but it shows a definite slowing for a phone that was already off to a more sluggish start then some expected.

Apple sold 5 million iPhone 5s in 3 days, but it took Samsung four weeks to reach 10 million sales.  Granted, the situation was a bit different -- the Galaxy S IV had perhaps more in common with the iPhone 4S, in that it was viewed by some fans as a disappointingly modest step forward, where as the Galaxy S III and iPhone 5 were viewed as larger leaps.  It should be noted that it did take the Galaxy S III seven weeks to reach 10 million sales, but that number is slightly misleading, given its slower global rollout.

Galaxy S 4
Sales of the Samsung GS IV, recently hit 20 million units globally. [Image Source: Yonhap]

It has taken Samsung nearly two months to move another 10 million units, marking nearly a 50 percent slowdown in monthly sales.  Overall sources expect Samsung to move 22 million smartphones in Q2 2013.

One crucial problem analysts believe face both Apple and Samsung is a slowdown of global smartphone sales growth.  BloombergReutersthe New York Times and the Wall Street Journal all warned of a growing market "saturation" on Friday.

II. Advertising Budget, Smartphone Profit Reliance Are Two Key Issues

And while that's certainly part of the issues surrounding Samsung, there's more too the investor concern than mere slowing sales, too.

In 2012 Samsung spent an estimated $4.3B USD globally on advertising its smartphone product -- the most of any company [according to AdAge], and four times the marketing spending of Apple.  The marketing is working, to an extent, but some analysts are concerned Samsung is overspending and getting diminishing returns on its investment.

HMC Investment Securities Comp., Ltd. (KSC:001500) analyst Nho Geun-Chang comments to Reuters, "I think Samsung spent more on marketing expenses than expected because of the launch of Galaxy S4 smartphone, which led the company's results to miss the market consensus."

Samsung hipsters
Some fear Samsung is spending too much on advertising.

Also concerning is Samsung's overdependence on its smartphone unit for profit.  Given the relative lacking profitability of Samsung's other units -- which include the mildly profitable semiconductor unit, along with other less profitable units such as appliances, televisions, and automotive -- Samsung received 74 percent of its profit from mobile phones.  That's more even than Apple, who receives 65 percent of its gross profit from the iPhone.

Again, there's more to this comparison than meets the eye -- Apple does have a much larger tablet sales volume driving much of its remaining profit, and Samsung still has a lot of room to grow in that market, where it's doing relatively well.  But the dependence on smartphones is certainly something to keep an eye on at Samsung -- and arguably at both companies -- as it leaves it (/them) vulnerable.

Jeff Kim, an analyst at Hyundai Securities Comp., Ltd. (KSC:003450), told Reuters, "One of the biggest risks for Samsung Electronics going forward is that 70 percent of total operating profit comes from mobile business. Diversification is key. Samsung needs to engage in active business transition until end-2014."

Korean Won
Some fear Samsung is relying too much on smartphones for profit.
[Image Source: 
SeongJoon Cho/Bloomberg]

Other analysts view this as more of a temporary situation, but remain concerned.  Jung Sang-jin, a fund manager at Samsung shareholder Dongbu Corp.'s (KSC:005960) subsidiary Dongbu Asset Management, comments, "Samsung's got diversified businesses. When one business lags, it's got others outperforming and propping up the overall profit.  The component business is widely expected to pick up the slack in the second half when smartphones slow, but now worries are also mounting that the component business' recovery could be short-lived."

Mr. Jung's biggest concern is that Samsung's new smartphones lack a "wow" factor.  He comments, "Is Samsung's smartphone story now over? Not quite yet. It's growth is indeed slowing due largely to disappointing sales of the S4.  Yet I think Samsung has some exciting stuff up its sleeves. The problem is no one is sure whether these products can really wow investors and consumers."

III. Tough Competition, but Promising Products

Will Samsung bounce back?

It's hard to say.  The company did release a trio of higher margin Galaxy S IV variants, each with slightly cut down hardware, but unique features.  One is the only smartphone with an optical zoom (the Galaxy S IV Zoom), another packs a rugged water-proof display (the Galaxy S IV Active), while a third has a smaller 4.3-inch form factor (the Galaxy S IV Mini).  If these sell well, it should drive up profit.

The Galaxy S IV Zoom

But the impending threat of the iPhone 5S looms on the horizon.  And HTC Corp.'s (TPE:2498One smartphone -- which received better reviews than the Galaxy S IV, on average -- also remains a surprisingly feisty challenger.  Then there's the Chinese -- Huawei Technologies Comp. (SHE:002502) with its upcoming Ascend P6The Lenovo Group, Ltd. (HKG:0992) with its Padfone/Fone Pad jumbo smartphones, and  ZTE Corp. (SHE:000063) with its Grand S, which launched earlier this year.  Lastly, there are wild cards like the recovering Nokia Oyj. (HEX:NOK1V) who is turning heads with the Lumia 1020 -- which packs perhaps the best camera in the smartphone industry.
HTC BlinkFeed
The HTC One

In short, Samsung remains king of the smartphone market in unit sales, and near Apple at the top in terms of profit, but threats from both within and without are shaking up share prices, amid its slowing growth.

Sources: Samsung, Yonhap, Reuters

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The next BIG thing... is the problem
By ComputerJuice on 7/5/2013 4:12:52 PM , Rating: 3
The trend of making HUGE phones is the only reason I'm not buying. I do not want a 5.6 inch tablet in my pocket. If there was a high performance phone with a 3-4 inch screen I pony up the cash right now. Sadly apple is actually beginning to look good to me just because the iphone has decent, although unremarkable, specs and a small-ish high-rez screen.

RE: The next BIG thing... is the problem
By Shadowself on 7/5/2013 4:50:01 PM , Rating: 3
I agree. The screen size and the fact that I want a higher end phone is why I'm considering an iPhone 5S. I'll have to see what the final specs are, but if it is truly an evolved iPhone 5 in essentially the same physical format then I might jump ship and buy one. I'll have to see what actually shows up before I decide.

I like to be able to drop the phone into my shirt/suit jacket pocket while seated during a meeting and NOT have to fish the phone out of, or place it into, my pants pocket. For me it's a phone first, computer a distant second, and a music player an extremely distant third. It's not a game console. Thus an ~ 4" phone is fine. But that's just me.

RE: The next BIG thing... is the problem
By Moto7451 on 7/5/2013 10:24:49 PM , Rating: 2
There are some nice smaller screened devices on Android as well. I'm a fan of the 3.5"-4" screen size and have an LG Motion 4G on MetroPCS. If you're on a GSM carrier, there's also the Galaxy S3/4 Mini line which doesn't seem to get much coverage. On my next upgrade, if I don't switch back to the iPhone, I'll probably go for one of those.

Knowing Apple they'll likely just iterate the 5's design. I'm more excited about the rumored "low cost" plastic devices since I'm on a prepaid carrier and like stupidly loud phone colors (a character defect, I know).

RE: The next BIG thing... is the problem
By testerguy on 7/6/2013 1:50:56 AM , Rating: 1
There are some nice smaller screened devices on Android as well. I'm a fan of the 3.5"-4" screen size and have an LG Motion 4G on MetroPCS. If you're on a GSM carrier, there's also the Galaxy S3/4 Mini line which doesn't seem to get much coverage

Strongly, strongly disagree. The Galaxy S3/S4 Mini's are horrible, horrible phones, as is the LG Motion. IMO.

By Moto7451 on 7/7/2013 4:50:14 PM , Rating: 2
Reasoning? The S4 Min has the same/better specs than the full size S3. I can't see how that qualifies as being horrible.

RE: The next BIG thing... is the problem
By CaedenV on 7/5/2013 5:39:03 PM , Rating: 2
I don't think you will need to worry much on that front. Up until now smartphones have been marketed pretty much only to men. Everything on the high end has been focused around a 4.5-5" display that packs as high of a resolution as humanly possible to look at. You then need a CPU and GPU that is as big as possible to drive that display, and then a battery big enough to keep everything turned on as long as possible. At the end of the day high end phones are merely high end in order to drive the large oversized displays. If they could put smaller hardware behind bigger screens they probably would for the sake of profit margins.

But now we have a few things happening:
-LiOn batteries have some neat new tech coming down the pipe which will allow for drastically smaller batteries that can drive the same hardware. This will allow for smaller phones to have bigger processors because you can run all day on a battery 1/2 the size of the ones we are using now.
-Intel is ratcheting up it's war on ARM and is finally beginning to offer some viable x86 alternatives to manufacturers. This is forcing ARM to make drastically more efficient (and more importantly; more capable) processors to keep their dominance in the field. This will result in much CPU and GPUs that require less die space, less cooling, and less power, which will fit in much smaller devices.
-Manufacturers are finally beginning to focus on making displays take up a larger percentage of the phone's front rather than only making phones thinner. This is important because a phone like my Lumia 920 has plenty of space to cram a 4.7" 1080p display in there if you can replace the empty bezel areas with screen space. Small phones are also very guilty of this issue of wasted space. True 'next gen' cell phones will focus on minimizing blank space on the front so that you may have a 4.5" display, but cram it into what would have previously been a 4" device, or a 4" screen in what you would normally think of as a 3.5" device, so that you get the benefits of a big high resolution screen, but without the fat package.
-But the biggest force of all to consider are women. As previously stated, men are the ones that smartphones are targeted to. Almost every adult male (and most of the kids as well) that I know who are remotely interested in having a smartphone already have one. However, only a little more than half of the women that I know have one, and most of them only have one because their husband's got one for them. They can easily afford to have smartphones, so that means that at least 1/2 of them don't want what is being offered, and few of the ones who have one have a phone they would have picked for themselves.
We picked up a pair of Lumia 920s when we finally got our first smart phones. I absolutely love mine, while my wife is not sold on it. She likes the OS and features... it is merely too big. Something the size of a Lumia 620, but with the camera and style of the 920 would be her dream phone right now, but as of right now that is simply not physically possible.

Still, I would bet you have a 2 year wait before you get true flagship 3.5-4" devices outside of Apple. But they will come in time.

By Xplorer4x4 on 7/7/2013 5:31:32 PM , Rating: 2
Most women I know have a smartphone. I would say most have iPhones but it seems like they are coming around to Android very slowly. One woman I know was turned off by what I believe was the pre-ICS UI. She swears she will never go Android but surprisingly her and my girlfriend both want the larger display of my Razr HD Maxx compared to their iPhone 5.Neither are tech oriented like us.

RE: The next BIG thing... is the problem
By TakinYourPoints on 7/7/2013 10:03:34 PM , Rating: 2
Size is a problem. Despite what internet forums and huge advertising would try and have people believe, large smartphones are a niche. The flagship GS3 and GS4 make up only a small fraction of Samsung's total smartphone sales. Most of what they sell are small low-end devices. The old iPhone 4S still outsells both the GS3 and GS4, and the iPhone 5 is selling even faster than the 4S.

There are lots of stats out there going over OS usage (internet traffic, mobile ads, app purchases, etc), but here are some more specific usage statistics based on form factor:

The dominant form factor is 3.5"-4.9" at over 70% while 5"+ smartphones make up only 3% of active users. Perhaps Samsung would do better by improving and better advertising products like the S4 Mini. They'd have a hard time giving them the same specs as the GS4 since flagship Android devices require a huge battery (hence the large chassis and giant screens), but there has to be a better compromise than the hobbled device that the Mini is at the moment.

Offering flagship performance in both GS4 size and S4 Mini size would only be good for them.

RE: The next BIG thing... is the problem
By retrospooty on 7/8/2013 7:34:22 AM , Rating: 2
You are gonna have to update your old "Android only outsells IOS on the low end" soapbox rant as well. I know its hard for you to keep up with the times and keep up with things while way up there on your imaginary pulpit ;)

RE: The next BIG thing... is the problem
By TakinYourPoints on 7/8/2013 4:54:01 PM , Rating: 2
If you look at actual sales and not shipments then the numbers are very different.

The fact that the best selling GS3 and GS4 are still outsold by the iPhone (both new and old) by wide margins is more important than only noting shipments shipments.

The GS4 took over twice as long as the iPhone 5 to sell (not ship, sell ) 20 million units, and again the old iPhone 4S continues to keep pace and outsell each individual model.

To be specific, Apple sold 20 million iPhone 5 in 3 weeks. It took over 8 weeks for the GS4 to do the same. Day by day:

"According to ISI Group Analyst Brian Marshall, “over the first 25 days of iPhone 5 availability, Apple shipped 805,000 units per day. In contrast, Samsung shipped less than half of that — about 333,000 Galaxy S4 units — per day.”

This explains the continued difference in internet traffic and mobile ad revenue between smartphone operating systems. If the high end Android smartphone share was larger then the numbers would be quite different, rather than being only a third of iOS despite there being about 5x as many Android devices out there. Bring tablet share into the mix and the difference is even higher.

And yes, there are obviously other high end Android devices out there, but the GS3 and GS4 dominate that segment so much that HTC/LG/Moto's share almost amounts to a rounding error.

You guys quote shipped numbers a lot. Its really weird. The only charts and figures I bring in have to do with actual sales and practical usage metrics.

RE: The next BIG thing... is the problem
By retrospooty on 7/8/2013 5:08:30 PM , Rating: 2
Meh... I dont really care who outships who, and certainly not in a "3 week slice" or "race to 20 million" picture... I was just jabbing you on your rant. I think of it only in a way of how many phones are out there and therefore how many users are affected by things going on with it... Anyhow what that chart shows is a rapidly changing dynamic.

The other thing I meant to reply on but got sidetracked was this "The dominant form factor is 3.5"-4.9" at over 70% while 5"+ smartphones make up only 3% of active users. "

Its an odd way to slice it since 5 inch phone really just got started. Other than the Note there werent any at all until the DNA/Butterfly late last year. For the vast majority of the past year+ most high end Androids were 4.65-4.8 inches. To say 3.5 to 4.9 inch screens are 70% of the market is sort of like saying cars are the most popular automobiles. Just within the past few months the standard high end device on Android hit 5 inches. Next year we will see how that went.

By TakinYourPoints on 7/8/2013 7:55:07 PM , Rating: 2
The thing is that those numbers extend through the lives of those devices, not just the initial launch. During the first quarter of this year the old iPhone 4S was still outselling the GS3.

Anyhow what that chart shows is a rapidly changing dynamic.

That chart shows an analyst pulling invented and unverified shipment claims (Samsung and Amazon don't give official shipment numbers either) that have absolutely nothing to do with units sold to customers. The same thing happened with tablet shipment numbers last year, and here we are in 2013 with reports of tablets sitting unsold in warehouses and being sold at clearance while the iPad has almost 85% usage share.

High end Andoid smartphones selling consistently half as much as their Apple counterparts does not result in what your chart shows. Over a long period of time the gap actually continues to widen. Even I thought that we'd have greater internet traffic and mobile ad revenue from Android, but the gap persists despite Android selling more than ever.

Again, it comes down to the high end being a niche. The GS3 and GS4 makes up under a quarter of Samsung's total sales and under half of Apple's.

I don't care either way, I'd just like to see better sources in these discussions. Lots of people seem to avoid usage metrics and official sales figures because it doesn't back up their personal bias.

By tallcool1 on 7/8/2013 11:53:37 AM , Rating: 2
I don't want to have to try and stuff a phablet in my pocket. I prefer the smaller screens like what the iPhone4S has. Performance and screen size is more than adaquate for making phone calls, texting, photos and some apps.

On another note, when I had to choose between a Samsung or Apple phone, both phones are made overseas, but at least one is designed by an american company headquartered in the USA. So I went with Apple.

By Motoman on 7/5/2013 5:33:35 PM , Rating: 5
...maybe, just maybe, people are getting tired of paying $600 for a *phone*. That has maybe a year of primary cycle. That frankly doesn't do anything they need to do any better than a $300 phone. Or maybe a $100 phone.

You could buy 2 decent laptops for the cost of an S4. Or a reasonable complete desktop system. Or a decent 50" flatscreen TV. Or a refrigerator. Or...make a rent payment.

The cost of these things is way out of control. I personally recently spent something like $360 on a Galaxy S Relay, and other than the newer version of Android (that really makes no difference in using the phone), it doesn't do anything useful any better than my last 2 phones. Slightly bigger screen I guess. And looking at phones that can be had for $100 to $200...well, if they had real keyboards (the reason I got the Relay), I probably wouldn't notice any difference in features or performance.

Smartphones got "good enough" a long time ago. Now they're just amping the cost into the stratosphere without any real benefit to the vast majority of users. Screw that...I just bought a whole Polk Audio PA system including huge stage monitor speakers, amp, and everything for what a f%cking smartphone costs.

RE: Maybe...
By xti on 7/5/2013 6:28:39 PM , Rating: 2
before the SG3, there was much to improve on. the gap between the sg3 and sg4 is vastly smaller, especially to the average joe who isnt going to care about mhz, cores, etc.

basically...they sunk themselves into this position where price, screen size and touchwiz evolution will make or break them

RE: Maybe...
By retrospooty on 7/5/2013 6:40:23 PM , Rating: 2
ITs still possible to make devices people want. I have nothing against Samsung. - A happy S3 owner, but what I really want is an HTC One Max (rumored large screen One) or DNA2. If they were out on my carrier I would drop cash immediately. The S4? bleh.

RE: Maybe...
By StevoLincolnite on 7/8/2013 4:03:45 AM , Rating: 2
The average person really isn't going to be pushing the hardware of current phones.
Only so much Ram and CPU time that you need for facebook, so like the PC, people are probably just hanging onto their devices longer as they do everything they want.

RE: Maybe...
By EricMartello on 7/7/2013 7:46:31 PM , Rating: 2
I'm still using a Galaxy S2 and it's the Windows Phone version which wasn't as "robust" in terms of processing power as the Android version. It's fine and I have yet to encounter a task that I'd like it to do that it cannot do. The main reason I got it over my older Galaxy S was that old phone broke...even my Galaxy S was good enough for its intended purpose

If we're keeping the smartphone around primarily as a portable communication device then there really isn't much to improve upon without compromising its size, weight and power utilization.

Does it make and receive phonecalls? Yes
Does it allow some degree of web browsing? Yes
Does it integrate with social media sites/hubs? Yes
Can it run "apps"? Yes

The pricing of these phones is outrageous considering that their CPU and underlying tech are essentially revised tech from 5-10 years ago. I remember them doing reviews about smartphones, using the time it takes to launch angry birds as a benchmark, citing that the phone which launches it a few seconds faster is "better". What a joke if that's the big justification to drop $500+ for this years phone!

RE: Maybe...
By w8gaming on 7/5/2013 11:29:39 PM , Rating: 2
Very well said. For me, Galaxy S3,Note 2 spec has already hit the performance level that I want in a smartphone. The newer phones simply does not offer any true benefits that provides good enough value for me. I will not buy another smartphone so soon not unless the older one has broken, or the new phone can deliver features that I deem worthwhile. Many other people have already felt the same and therefore the unit sales from both Apple and Samsung is slowing down. There is really not much these companies can do to boost sales on their premium model. Every company will eventually have to learn to live with a more saturated market which advertisement does not do that much, and cost control is way more important. As the midrange segment performance starts catching up, highend models will get even harder to sell.

RE: Maybe...
By Motoman on 7/6/2013 3:28:53 PM , Rating: 2
I would argue that the plateau was hit a generation or two earlier, but regardless...I think the phone makers would be vastly better off now using the march of progress to make phones more affordable - not keep cramming more crap into them that won't do us any good.

Basically you can do 2 things as technology advances - come up with new bells and whistles, or you can decrease cost. We are well past time to stop worrying about new bells and whistles and start working on getting smartphones to cost something vaguely reasonable, as opposed to 50-inch-TV level prices.

RE: Maybe...
By Drafter on 7/6/2013 9:55:55 PM , Rating: 2
You make good points. I think perhaps the smartphone market is reaching saturation for new owners and existing owners are content with their smartphone.

Then there's the cell providers who have us by the balls with the contracts. For me, I'm eligible for a Verizon upgrade but my options suck. I can either renegotiate the contract and lose my unlimited data or pay full price. I choose neither! If I'm going to pay full price to keep my unlimited data, I'm waiting for Snapdragon 800 or better.

You can save ~$100 shopping for a new S4 on Ebay while also selling your used S3 for ~$200-250 to make it ~$300-350 out of pocket to acquire an S4. That's not dramatically more expensive than the $199 contract price, but still not worth it IMO.

RE: Maybe...
By inperfectdarkness on 7/7/2013 11:28:03 AM , Rating: 2
In many ways, it's similar to the desktop GPU market, once gaming software progress stagnated. There's really no reason for anyone to buy a $900 GPU, let alone a $500 one; games simply cannot offer the returns to justify it. In an age when many laptops can render the newest games in 1080p at > 60fps...there's just no incentive.

RE: Maybe...
By FITCamaro on 7/7/2013 10:22:51 PM , Rating: 2
Simple solution here. Return it and keep using your old phone then. Instead of whining about how much they cost and continuing to buy them.

A smartphone like the GS4 packs the functionality of a small laptop and a basic point and shoot camera into something roughly the size of a large deck of cards at less than half the thickness. Smaller, more energy efficient components cost more money. Not to mention all the advertising. That is why the phones cost so much.

RE: Maybe...
By ryedizzel on 7/8/2013 2:58:45 PM , Rating: 2
...maybe, just maybe, people are getting tired of paying $600 for a *phone*. That has maybe a year of primary cycle. That frankly doesn't do anything they need to do any better than a $300 phone. Or maybe a $100 phone.

You could buy 2 decent laptops for the cost of an S4. Or a reasonable complete desktop system. Or a decent 50" flatscreen TV. Or a refrigerator. Or...make a rent payment.

The cost of these things is way out of control. I personally recently spent something like $360 on a Galaxy S Relay, and other than the newer version of Android (that really makes no difference in using the phone), it doesn't do anything useful any better than my last 2 phones. Slightly bigger screen I guess. And looking at phones that can be had for $100 to $200...well, if they had real keyboards (the reason I got the Relay), I probably wouldn't notice any difference in features or performance.

Smartphones got "good enough" a long time ago. Now they're just amping the cost into the stratosphere without any real benefit to the vast majority of users. Screw that...I just bought a whole Polk Audio PA system including huge stage monitor speakers, amp, and everything for what a f%cking smartphone costs.

Amen brother.

Not at all surprising.
By retrospooty on 7/5/2013 3:42:03 PM , Rating: 2
To think that the S4 would sell more than the S3 (which sold more than the S2) is logical... To think it would sell 100 million units as Samsung was planning is kind of ridiculous. It's only one of many high end Phones and there really isnt alot that makes it stand out from the others... And the greasy plastic turns alot of people off. I have an S3 and that is why I didnt get an S4. The plastic is strong and very scratch resistant, but it just feels cheap and it shows every smudge.

I am keeping my fingers crossed for a Verizon One Max or DNA2.

RE: Not at all surprising.
By Nortel on 7/5/13, Rating: 0
RE: Not at all surprising.
By retrospooty on 7/5/2013 4:15:39 PM , Rating: 2
Agreed, its not much of an improvement over the S4 and not alot of reason to upgrade. That and there is a lot more high end phones to choose from today vs. last year. The market is flooded with 5+ inch 1080p high DPI android phones. The S4 is just one of them and not a particularly attractive one at that. For them to think they would sell 100 million of them is a laugher.

For me, I upgrade every year anyhow. I can basically get anything I want on Verizon, but I dont want the S4. Waiting to see if the One Max comes or the DNA2. If the DNA2 matches the Butterfly S like the 1st DNA matches the 1st butterfly, I am all over it. 5 inch, 1080P Super LCD3, the same camera from the One, front facing speakers, less Bezel than the One and a 3300ma battery. Sounds perfect to me.

By btc909 on 7/6/2013 12:48:57 PM , Rating: 3
I'm grandfathered into the Unlimited Data Plan, well as we all know you can't keep that plan on a new contract phone. I generally get a new phone every two years if I need one or not, then sell the old phone on FleaBay fopr close to $200. Count two "sales losses" for me.

end of high priced phones
By jmerk on 7/5/2013 4:35:35 PM , Rating: 2
I feel with high-end, high-profit phones struggling plus the US seems to be slowly moving away from phone subsidies with 2 year contracts, my guess is that it is going to be harder and harder for companies to sell phones 500+ and more and more people are going to be satisfied with a 300 phone and cheaper plans.

By SpartanJet on 7/7/2013 2:12:14 PM , Rating: 2
When Samsung decides to put the processor intended for the phone in the American version I will interested in Samsung again. They have this bad habit of not bringing their best to America for whatever reason (like their phones and Ativ book 8 still doesn't have the AMD 8870M for sale in the US). When they decide America is a priority I will buy from them again. Until then they are dead to me.

By cyberguyz on 7/8/2013 9:01:11 AM , Rating: 2
Sometimes we need to wonder. But what is the purpose of a smartphone?

It is a voice communications device, and if that were all it was, then there would certainly be no deed to run quad cores at 1.9 Ghz, 2 GB memory or a 5" screen. But smartphones are a whole lot more than the simple voice communications devices of 10 years ago. Today they are not only that but they are also:

- Data terminals
- Networking nodes
- Networking gateways
- Gaming devices
- General computing devices

Do those bulleted things sound familiar? Look at the laptop or PC you are using and you will find a lot of similarities there. Nobody complains about a PC having the latest video, processor, oodles of hard disk space or memory. After all, more is better, right? That smartphone you are holding in your hand has a lot of similarities to these.

I predict that it won't be long before there are external display and input facilities (looking at bluetooth here) that let you use your smartphone with a real monitor./TV and keyboard/mouse.

In fact this kind of thing has already been done (Motorola ATRIX 4G). How long before that catches on? I bet if Samsung and Apple jump on that boat, you will see the lines between smartphones and general purposes blur to non-existence.

By rippleyaliens on 7/8/2013 3:19:48 PM , Rating: 2
This is Typical. If you look at a long enough timeline with regards to PC's.. It is same vicious cycle. Many people complain about the "New Phone", Investors get their panties in a rush. BUT reality hits. A new phone is not really needed every 12 months. Granted todays phone the S4, (i just picked up one), is Light speed difference, then what a Phone was in 2010, let alone 2011.

PC's Were built with a 2yr EOL. Meaning, that within 2 years, It will be out-classed. THIS doesnt mean that the computer is worthless, BUT more so- a NEW PC, (PHONE), just builds on the last few generations.

Next years, phones, will completely destroy 2011-2012 Phones in Raw Performance, and capabilities. BUT will build up, on 2013 Phones.

I guess certain techies, expect Commodity pricing- (close, but will take 2-3 MORE years, ).. Its the same with Iphones.

MANY people complain, say- that there are not many new features.. BUT- folks, fail to really think. THE Iphone 5, came out LAST year.. AND YET folks, are EXPECTING a WOW!!! Factor, (it has only been 12 months), lol

Who actually needs a smartphone?
By edge929 on 7/8/2013 4:54:41 PM , Rating: 2
Meanwhile some of us self-proclaimed geeks are still rocking not-smartphones. I'm surrounded by internet at work, home and most public places so why would I pay $40+ a month just for a data plan on top of my minutes/texts? How many of you are looking up prices of groceries/clothes while at the store? I have non-techie friends who buy the latest iPhones and Galaxies just to fit in. Beyond playing the occasional game while waiting, they don't actually use it for anything more than the phone/texts. Maybe I'm missing something, a secret that only smartphone owners know about. My Nexus 7 fills the very small niche of "gee it'd be nice to have a portable entertainment device with me right now". The only way I could justify a smartphone + data plan is if I traveled frequently and even then, my company should be paying for it. What am I missing here?

By dxf2891 on 7/11/2013 9:43:09 AM , Rating: 2
The problem is that these devices come out too often. Most carriers require a two year contract and yet the phone manufacturers come out with a new phone every year. How about this: Come out with a device every other year and continue to support the devices that you have out. Update the firmware and OS so that those who purchase your devices feel as though they're devices have some value. At least through the life of their contract. I know, I know, discussions about technology is no place for common sense!

By xti on 7/5/13, Rating: -1
RE: still?
By BRB29 on 7/5/13, Rating: -1
RE: still?
By maevinj on 7/5/2013 3:41:11 PM , Rating: 5
I normally wouldn't stick up for Jason, but this is actually a good article. Samsung and Apple are direct competitors facing very similar situations, so comparing both companies problems to each other helps to develop the story.

RE: still?
By Shadowself on 7/5/13, Rating: -1
RE: still?
By retrospooty on 7/5/2013 4:46:12 PM , Rating: 2
You and XTI both stand to dial down the paranoia a few notches... Either that or you need to just embrace it and get measured for Tinfoil hats.

RE: still?
By Shadowself on 7/5/13, Rating: 0
RE: still?
By retrospooty on 7/5/2013 5:07:25 PM , Rating: 2
I am not really seeing any Anti Apple sentiment or "jabs" in the article above... Just mentioning #'s. ?

RE: still?
By Moto7451 on 7/5/2013 10:17:12 PM , Rating: 2
It's the weird attempts to maneuver around the slightly bad results Samsung had by creating some weird Apple/Samsung dichotomy. I.e. Samsung made 74% of its profits from phones and the rest of their units are relatively weak, which some analysts aren't happy with... but hey look Apple makes 68% of their profits from phones so it must be ok.

At least thats how it sounds to me.

Really, one quarter tells you nothing about a company and analysts and investors don't seem to work on the same plane of reality as the rest of the (far more rational) human race. Samsung will be fine unless they have multiple successive bad quarters... and even then... look at AMD. They've been second fiddle to Intel and turning out bad numbers for years but they're still around.

The whole reason this particular article exists is because people have decided to assign themselves a brand in either Apple or Samsung (or X brand) and it's become personal. I love Apple devices, but not so much that I was willing to keep paying AT&T $110/month for poor service (honestly my distaste for AT&T & Verizon's business practices goes beyond any fanboi-isms I might possess haha). Hence why I have an Android phone and a $55/month Unlimited prepaid plan (I did this a good year and a half before Apple devices hit prepaid phone companies).

RE: still?
By mckinney on 7/5/2013 6:44:31 PM , Rating: 2
I think the first two posts are more realistic for Jasons blogging. If you read his blog on the Nokia 1020

he is more persistent to compare the camera to the Iphone 5, but not the S4 which has more pixels )and a sensor of comparable size to the IP5). The blogs subheading reads

Sensor is an estimated 5x the size of the iPhone 5's

Jason is only blogging to his clients preferences. He used to write more favorable Apple blogs but was getting his a$$ handed to him by the readers.

If one wants to read Jasons more Pro-Apple writing (from 9 mo ago), go to:

Funny, his profile says the following:

I pride myself on delivering concise, comprehensive, thought-provoking coverage with a fun spirit. I operate under the guiding principle that you should write in a way that you would want to read as a reader. I also always try to keep an open mind on all topics and will happily enter discussions with my readers. Outside my journalistic endeavors I enjoy doing graphic design for iOS applications, backpacking, running, and exploring the multitude of music the world has to offer.

He must have a different personality that likes to write for two different sites, as doesn't write "Apple Favorable" content at DT.

Personally, I think he is a "closet Apple Fan"

RE: still?
By Uncle on 7/6/2013 12:11:35 AM , Rating: 2
Things are just going to get better. As soon as the marketing team has figured out how to sell us on a six month old phone as being a piece of Sh*t. As of now my new phone still takes a few nano seconds to dial and my texting hasn't improved either. So until they improve those two items, I'll be sticking with this phone for awhile yet.

RE: still?
By Commodus on 7/5/2013 3:48:04 PM , Rating: 3
I never get this attitude -- this notion that you must be sheltered from having to hear about competition, context and different points of view. It's like translating the Fox News ethos to technology websites.

If you want nothing but isolated news about a given company, please visit a fan site.

RE: still?
By xti on 7/5/2013 6:26:01 PM , Rating: 1
not entirely what I am pointing out - by all means, talk about related stuff later in the article. your opening lines you dont talk about the article at all because of the authors fanboyism

i mean, if you write a paper about your thesis sentence about gatorade?

"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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