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Will Galaxy S3 match its predecessor success?

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The recent launch of Samsung Galaxy S III, the youngest in the Galaxy range has certainly managed to create a stir in the market, both for the intense hype surrounding the release as well as the aftermath.

Samsung Galaxy S3 is betting on its custom made software, display size, processor speed, and other innovative differentiators to grab eyeballs in the intensely competitive smartphone industry in India.

Matching the Hype?
The smartphone packs in a 1.4 GHz Quad core processor, has a 4.8 inch HD Super AMOLED display, an 8MP camera, a 1.9MP front camera, and is powered by Android 4.0 Ice Cream Sandwich; one of its biggest selling points. With a tagline ‘Designed for humans’, it looks at enhancing the user experience with personalised features like ‘Smart Stay’ which detects user movements with its front facing camera, and keeps the screen from going off, ‘S’ voice, similar to iPhone’s Siri app, which allows the user to control the phone through his/her voice. ‘S Beam’ allows video sharing by a mere physical contact between two devices, and ‘Pop up play’, allows users to multitask and watch videos while browsing or messaging, among several other novel additions.

Ranjit Yadav, Country Head, Samsung Mobile & IT

Ranjit Yadav, Country Head, Samsung Mobile & IT

Samsung, on its part is pursuing aggressive marketing strategies to sustain the hype around Galaxy S3, which is billed as the official smartphone of the London 2012 Olympics. The company claims this to be one of its biggest communication drives, with heavy advertising across all media platforms. “There will be a lot of focus on experiential marketing, with consumers getting a firsthand experience of the power of the phone through different consumer touch points and activations,” says Asim Warsi, Vice-President, Samsung India.

On the company’s active pursuit of digital marketing, Warsi says that with 50 per cent of mobile users being netizens, digital marketing holds significant potential since a lot of the information capture and pre-purchase decisions are made on the web.

Peshwa Acharya, CMO of Globacom, an Africa based telecom operator

According to Peshwa Acharya, (currently the CMO of Globacom, an Africa based telecom operator), the brand recognition and reputation of the Galaxy series and the marketing hype built around the phone are notable positives for the company, with the greatest advantage being the presence of the Android operating system.

Naresh Gupta, Managing Partner &  Chief Strategy Officer,  Bang in the Middle

Naresh Gupta, Managing Partner & Chief Strategy Officer, Bang in the Middle

On the other hand, Naresh Gupta, Managing Partner &; Chief Strategy Officer, Bang in the Middle applauds the phone from a device perspective, with its bright screen, camera, and other features but finds it lacking from an ‘experience’ perspective. “The problem lies with the Android platform. Since the Android works on a platform where the hardware is not standardised, every phone will give a different experience,” he explains.

Acharya agrees that the deciding factor will be making consumers switch to the Android platform, and more importantly choose Samsung’s premium smartphone, considering the availability of Android platform across a price range of Rs 10,000 to Rs 40,000.

Is the High Price a Bane?
While these aforesaid benefits place Samsung Galaxy S3 in a formidable position, it is the price tag of Rs 43,180 that has caught many off guard.

While the high price can be primarily attributed to the depreciating Rupee, and will probably reduce once the currency strengthens, will the current premium price affect the smartphone’s sales, especially with rumours of a new iPhone launch in the near future?

Many experts seem to agree. Gupta feels that most Indian buyers would certainly think of waiting for the next Apple offering before shelling out such a huge sum for Galaxy S3.

The seemingly high price of the phone is likely to increase competition from not just iPhone 4S   , but other smartphones like HTC One X, HTC One S, Sony Xperia S, as well as from the line up of Android based smartphones slated to hit the market soon.

Ramandeep Singh, Founder & Editor-in-Chief, TechClap.com is of the opinion that Samsung has primarily focussed on the features of S3, and because of the high price, smartphone buyers might go for HTC One X or to some extent even Sony Xperia S, both of which are selling in the Rs 30,000 range. “Galaxy S3 wouldn’t help Samsung in getting a larger market share, at least when it is selling over Rs 40,000. Users will wait for a price drop before purchasing it,” he opines.

Acharya echoes similar price concern. However, he is of the opinion that Samsung’s strategy behind this new launch is not to see huge volumes, but to establish Samsung’s top end leadership.

Smartphone Market: A two-horse race between Samsung & Apple?
How does Samsung Galaxy S3 help the South Korean technology group in breaking Apple’s hegemony in the smartphone space?

According to Gupta, Apple scores over S3 in the former being able to provide an outstanding experience of the phone, and is unsure whether the latter would succeed in moving the Apple fanatics.

Many experts are of the opinion that Apple has a cult following in India, and has a certain halo around it. Apple loyalists therefore wouldn’t mind spending a few extra Rupees on this flamboyant brand that still has an exclusive aura around it due to its US-centric approach and non-availability in India.

Acharya feels that while Samsung, with its powerful Android operating system has increased the options for high-end smartphone buyers, a segment that was earlier the monopoly of Apple, there is a difference between their respective strategies. “Apple doesn’t wish to be a mass market brand in India, it is happy with its exclusive tag and a niche consumer class. Samsung, however has to straddle from top to bottom,” he says.

Moreover, according to Acharya, while Apple users do not make a feature-based comparison while purchasing an Apple product, owing to its cult following, Samsung hasn’t reached that stage in the top-end, premium smartphone segment, and will have to deliver on both the price and the features front.

On the global front, the competition between the two is equally heated up. According to a recent research carried out by Strategy Analytics, in the first quarter of 2012, Samsung overtook Apple to become the world’s largest smartphone vendor by volume with a 31 per cent market share.

Neil Mawston, Executive Director at Strategy Analytics, added, “Apple shipped 35.1 million smartphones worldwide and captured 24 percent marketshare. Samsung and Apple combined now account for more than half of global smartphone shipments for the first time ever.”

But do such numbers highlight the correct picture or overarch some crucial factors?

Gupta is of the opinion that while Samsung might be catching up with Apple in terms of volumes, there are no figures available that would provide their respective value shares. And it is in terms of the price each of them really commands that Apple scores. “Samsung’s Galaxy range is a highly interesting range, with smartphones ranging from as low as 10,000 to a premium price of 40,000, and so it is very clever in terms of how numbers get posted. Apple, on the other hand operates in only one price range,” he explains.

Positive Outlook
Anshul Gupta, Principal Research Analyst at Gartner considers the smartphone market as a high-growth market and expects it to reach 1.3billon units in 2016 from 470 million in 2011. According to him, being a highly commoditized market, differentiation is a big challenge for smartphone manufacturers, with affordability, ecosystem, and the brand being the other deciding factors in this market.

While it remains to be seen whether Samsung Galaxy S3 is able to continue the successful run of the Galaxy series, the company is bullish on its overall growth.

Ranjit Yadav, Country Head – Mobile & IT Business at Samsung India feels India to be an underpenetrated market in terms of smartphones, and according to him, though the mobile industry is witnessing a flat growth on account of the poor economic indicators, Samsung has been growing, and is targeting a 60 per cent share of the Indian smartphone market in 2012, from its existing share of almost 46 per cent.

Does High price really matter?
Many would argue that since these high-end smartphones target a niche, upscale consumer segment, a few thousands here and there in terms of pricing would not drastically affect sales.

Acharya is of the opinion that being primarily a replacement market, with not many new entrants, pricing does play a crucial role in enabling the existing smartphone users to switch to other offerings.

Moreover, according to him, Samsung is looking at creating an image leadership with Galaxy S3, and to cement its image in the high-end segment, positive user reviews would be the key.

Gupta, on the other hand feels that consumers belonging to the price inelastic market, who would purchase a new product in the market irrespective of its price are only a numbered few, and get exhausted soon. What remains are those who look for value for money. “All these premium price phones, including Apple get a huge spike initially, and thereafter begin to languish,” he says.

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