Editor’s note: Samsung Electronics Co., Ltd. Wednesday (Sept. 3) announced the expansion of its flagship Galaxy Note series with the new Galaxy Note 4 and Galaxy Note Edge.
- Samsung has consistently led the market using the large smartphone category, but over the last three years the smartphone market has changed.
- The Note 4 is a straight evolution of 2013's Note 3.
- The Galaxy Note Edge is a more striking device which is visibly more differentiated from other smartphone markers' devices because of its curved screen.
- Apple's shadow hangs over Samsung's Note announcements. Cupertino's smartphone maker has shipped more iPhones so far in 2014 than a year earlier despite not offering any models with screens larger than four inches.
Samsung has consistently led the market using the large smartphone category, ever since Samsung launched the first Galaxy Note in 2011. Then, no one believed in this smartphone form factor, and yet Samsung created a successful market category.
But over the last three years the smartphone market has changed: Mainstream flagships have grown much larger, and as a result the Galaxy Note model is less differentiated than it used to be. Samsung still holds a leadership in large screen smartphones because of the Note branding, and Samsung's ongoing focus on stylus control for its Note handsets.
The Note 4 is a straight evolution of 2013's Note 3. The screen is the same physical size. There are minor adjustments to sharpen the industrial design. Plus Samsung continues to improve screen quality and offer a content and services bundle. The 805 chipset's support for LTE carrier aggregation will increase the appeal of the Note 4 for operators. Plus, Samsung is smart to use software as well as hardware to deliver a strong "selfie" experience. It's a solid update. But there is little in the Note 4 which will change the trajectory of Galaxy Note shipments.
The Galaxy Note Edge is a more striking device which is visibly more differentiated from other smartphone markers' devices because of its curved screen. Unlike previous curved screen smartphones, such as the LG Flex, the Galaxy Note Edge screen delivers practical benefits. But to maximize the differentiation, Samsung will need third party app developers to support the edge display. And because Samsung offers this display on just one handset, few app developers will choose to support it unless Samsung pays app developers to tailor their apps. To maximize its differentiation, Samsung should chose to offer the edge display on most of its portfolio, and so create a large attractive installed base for app developers.
Shadow of Apple
Apple's shadow hangs over Samsung's Note announcements. Cupertino's smartphone maker has shipped more iPhones so far in 2014 than a year earlier despite not offering any models with screens larger than four inches. Any consumer wishing to own a large screen smartphone has had to choose another handset maker. If, as IHS expects, Apple offers one or more larger screen iPhones next week this will increase competitive pressure on all Android smartphone makers.
As Android market leader, Samsung has most to lose from stronger Apple competition. With the Note, Samsung is choosing to emphasize the stylus as a way of countering Apple. This will not be enough. Samsung will have to spend to support its brand and operator distribution channels to maintain its market share.
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