Home » consumer computing » Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price

Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price

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OR Samsung is leapfrogging Apple while the Chinese local brands are coming close to Samsung but at less than 40% price. Meanwhile the superphone segment of the market becomes saturated.

This is even more important as coinciding with:
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the cloud’, July 20-29, 2013]
GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the cloud’, July 22, 2013]
Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the cloud’, Aug 1, 2013]
UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012; Aug 1, 2013]

Now the following things are coming in addition to that:

  1. [Samsung is] Leapfrogging Apple while regaining only some high-end SoC supply to it
  2. Chinese local brands are coming close to Samsung but at less than 40% price
  3. The superphone segment of the market becomes saturated
  4. Previous (pre-saturation) milestones according to Samsung

This will be the organization of the ‘DETAILS for the assesment of upcoming changes’ part of this post.

To appreciate the real significance of the sudden change characterized above let’s first get acquainted with the current state of the lead market as described in China Report: Device and App Trends in the #1 Mobile Market [by Mary Ellen Gordon on Flurry Blog, July 23, 2013]

Smartphones and tablets have gone from being the latest gadgets for relatively affluent people in relatively affluent countries to ubiquitous devices in mainstream use in many countries around the world. In fact, as we reported in February of this year China surpassed the US to become the country with the largest installed base of connected devices as measured by Flurry Analytics. As we also reported, a second wave of countries around the world is now experiencing the type of growth mobile pioneer countries experienced previously. For example, the mobile markets in the BRIC countries are now all growing faster than the mobile markets in the U.S., U.K., and South Korea.
Knowing that the landscape is constantly shifting, we are beginning a series of blog posts reporting on the use of smartphones, tablets, and apps in particular countries and geographic regions around the world. Given China’s world-leading installed base and considering the China Joy conference (China’s largest digital conference) is this week we thought we would begin there.
In June of this year Flurry Analytics measured 261,333,271 active smartphones and tablets in China. That represented a whopping 24% of the entire worldwide connected device installed base measured by Flurry. The chart below documents the growth in the installed base. The left axis and blue line show China’s growth over the years. The right axis and red line show growth in the world as a whole (including China) a basis of comparison. As can be seen from the gap between the two lines growing through 2010 and much of 2011, growth in smartphones and tablets in China lagged the world as a whole through that period. But starting toward the end of 2011, the installed base in China began a period of exponential growth. During this period it surpassed the growth rate for the world as a whole, as shown by the blue line catching the red line in the graph. We expect China to maintain its leadership (in terms of active installed base) for the foreseeable future because device penetration rate is still relatively low and much opportunity remains, as we reported in a previous post.


Xiaomi Is A Local Manufacturer To Watch
Examining a random sample of 18,310 of the devices in our system in China that run iOS or Android apps revealed that Apple and Samsung are the top two device manufacturers, as they are most everywhere. China’s own Xiaomi was a strong third, with a 6% share of the market, ahead of HTC, Lenovo and a multitude of others. As we noted in a previous post, Xiaomi has been successful in accumulating a large number of active users for each device model it releases. Worldwide, only Apple, Amazon, and Samsung have more active users for each device model released.


It will be interesting to see if Xiaomi can continue to gain share in China – possibly by mopping up share from smaller manufacturers of Android devices – and also if they can begin making gains in other markets outside of China to become more of a global player. With rumors of a Xiaomi tablet circulating, we will also be watching to see if their entry into the tablet market will increase the use of Android tablets in China. Currently 21% of the iOS devices in our randomly drawn sample were tablets compared to only 4% of the Android devices.
Chinese Users Over Index in Reading, Utility, Productivity
In looking at how Chinese people use their connected devices we see similarities and differences compared to the rest of the world. As a general rule worldwide, games dominate time spent in apps measured by Flurry Analytics, and China is no exception. On average, Chinese owners of iOS devices spent 47% of their app in games. The percentage of app time devoted to games was even greater for Android at 56%.


Smartphones and tablets are not just about fun and games in China. Compared to iOS device owners elsewhere, the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps is greater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). On average Chinese owners of Android devices spend more than seven times as much time in Finance apps (7.4x) than Android owners elsewhere spend in Finance apps, but they also spend more time in Entertainment apps (1.7x).


Will China’s Exponential Growth Change The Device And App Markets?
It will be interesting to see how China now having leadership in terms of its installed base will impact the device and app markets elsewhere. Given Xiaomi’s success at building a large number of users for each model it releases, it might try to add further scale by expanding internationally – particularly to the other rapidly-growing BRIC markets where brand preferences are not already well-entrenched.
Within China itself, Chinese competitors may have an even greater advantage in the app market since cultural influences and differences are likely to be even more important in the app market than in the device market. There are already strong Chinese app companies such as Baidu and Tencent and clusters of app developers emerging in places like Chengdu. At first they are likely to concentrate on apps for the large local market, but that may eventually lead to growing app exports. For example, the fact that Chinese consumers over-index on some more work and educational-oriented apps may encourage Chinese developers to focus on those areas and innovate, and that could lead to creation of apps that end up being adopted elsewhere in the world. We’re looking forward to discovering what app is to China what Angry Birds was to Finland.

And it is also important to understand that as far as the current situation is concerned Samsung’s China magic upstages Apple [Reuters TV, July 25, 2013]

Tim Cook may be scratching his head over slumping China sales, but smartphone competitor Samsung is raking in the cash. Here’s how the South Korean tech giant is doing it.

Insight: How Samsung is beating Apple in China [Reuters, July 26, 2013]

Apple Chief Executive Tim Cook believes that “over the arc of time” China is a huge opportunity for his pathbreaking company. But time looks to be on the side of rival Samsung Electronics Co Ltd, which has been around far longer and penetrated much deeper into the world’s most populous country.
Apple Inc this week said its revenue in Greater China, which also includes Hong Kong and Taiwan, slumped 43 percent to $4.65 billion from the previous quarter. That was also 14 percent lower from the year-ago quarter. Sales were weighed down by a sharp drop in revenues from Hong Kong. “It’s not totally clear why that occurred,” Cook said on a conference call with analysts.
Neither is it totally clear what Apple’s strategy is to deal with Samsung – not to mention a host of smaller, nimbler Chinese challengers.
Today, in the war for what both sides acknowledge is the 21st century’s most important market, Samsung is whipping its American rival. The South Korean giant now has a 19 percent share of the $80 billion smartphone market in China, a market expected to surge to $117 billion by 2017, according to International Data Corp (IDC). That’s 10 percentage points ahead of Apple, which has fallen to 5th in terms of China market share.
Cook said Apple planned to double the number of its retail stores over the next two years – it currently has 8 flagship stores in China and 3 in Hong Kong. But, he added, Apple will invest in distribution “very cautiously because we want to do it with great quality.”
Samsung, with a longer history in China, now has three times the number of retail stores as Apple, and has been more aggressive in courting consumers and creating partnerships with phone operators. It also appears to be in better position, over an arc of time, to fend off the growing assault of homegrown competitors such as Lenovo Group Ltd, Huawei Technologies Co Ltd and ZTE Corp, former company executives, analysts and industry sources say.
Apple declined requests for comment for this article.
Samsung’s history and corporate culture could hardly be more different than Apple’s, the iconic Silicon Valley start-up founded by Steve Jobs and Steve Wozniak in 1976. Lee Byung-Chull started Samsung in 1938 as a noodle and sugar maker. It grew over the decades into an industrial powerhouse, or chaebol as Koreans call the family owned conglomerates that dominate the nation’s economy and are run with military-like discipline.
Apple, by contrast, became the epitome of Californian cool, an image the company revels in. That hip image translates in China – its stores are routinely packed – but hasn’t been enough to overcome the more entrenched Samsung.
A stuffy electronics bazaar in the southern Chinese city of Shenzhen illustrates part of the reason why.
Samsung Galaxys and Apple iPhones of different generations sit side by side, glinting under bright display lights as vendors call out to get customers’ attention. With its varied models, Samsung smartphones outnumber iPhones at least four to one.
While Apple releases only one smartphone a year, priced at the premium end of the market, Samsung brings out multiple models annually with different specifications and at different price points in China.
And those models, analysts say, are loaded with features tailored specifically for the local market: apps such POCO.cn, the most popular photo sharing site in China, or the two slots for SIM cards (Apple offers one), which allows service from multiple cell carriers, either at home or abroad.
“The Chinese just love features. They want their phone to have 50 different things that they’re never going to use,” said Michael Clendenin, managing director of technology consultancy RedTech Advisors. “Apple just doesn’t play that game. Unfortunately, if you want to hit the mainstream market in China, and you want a lot of market share percentage points, you have to offer the Swiss army knife of cellphones.”
Analysts believe Samsung’s increasing strength in China is a critical reason behind its rival’s possible intention to introduce globally a new and cheaper iPhone model, as well as one with bigger screens – a staple of Samsung’s offerings.
Said a Samsung executive with experience in China: “We definitely think we’re setting the pace there. They are having to respond to us.”
Most audaciously, Samsung has gone after Apple not simply by offering lower priced smartphones, but by attacking its rival directly in the pricier end of the market. “We put a lot of emphasis on the high end market in China,” co-CEO J.K. Shin told Reuters in an interview.
Samsung launched a China-only luxury smartphone together with China Telecom marketed by actor Jackie Chan that retails for about 12,000 yuan ($2,000). The flip phone, named “heart to the world,” is encased in a slim black and rose gold metal body. The sleek look – called “da qi” (elegantly grand) – is coveted by Chinese when they shop for cars, sofas or phones.
“There are a lot of ‘VVIP’s’ in China, and for them we launched luxury phones promoted by Jackie Chan. This helps target niche customers and build brand equity,” said Lee Young-hee, executive vice president of Samsung’s mobile business.
While Samsung won’t sell millions of these smartphones, the creation of the phone in conjunction with a carrier reinforces Samsung’s willingness to go local – and tap into niche markets.
The key point is that Samsung consistently adapts to the local market,” said TZ Wong, a Singapore-based technology analyst with IDC.
Apple’s latest mobile operating system offers links to popular Chinese applications like Sina’s microblogging platform Weibo, but the application itself must be downloaded onto the phone. On all of Samsung’s entries, it’s already there.
“People know intellectually that Samsung is from Korea, but when it comes to the messaging there is always a local face,” Wong said.
Samsung opened its first office in China in 1985 in Beijing – an era in which it was all but inconceivable that Apple and Samsung would end up in one of the world’s most intense corporate grudge matches. Like other South Korean chaebols, Samsung was a first mover in China, using the market primarily as a base to produce electronics for the world.
In contrast, Apple’s big push in China came only recently, with the advent of the smartphone age roughly five years ago.
The early entry gave Samsung an undeniable edge, and it adapted fast to a rapidly changing environment. By the mid-1990s, with the economy booming, Samsung made the strategic decision to treat the Chinese market not just as a production base, but to start marketing to China higher-priced electronics, said Nomura researcher Choi Chang-hee, who wrote a history of Samsung’s experience in China.
That shift has meant Samsung’s retail presence in China far outstrips Apple’s. Aside from selling via the distribution outlets of the three major telecom carriers, Samsung also has a strong retail presence through its partners Gome Electrical Appliances and Suning Commerce Group, as well as its own “Experience” stores and small retailers all over the country.
Apple works through the same channels, but its relatively late entry means it has a significantly smaller presence. Samsung, for example, has more than 200 official distributors and resellers in Guangzhou province, while Apple lists 95.
Over the last two decades, Samsung has also taken pains to build relationships with Chinese government officials and -perhaps more critically – the three major telecom carriers.
The notion of the importance of connections – or “guanxi” – in China is occasionally overrated in business. Not, according to Samsung’s Shin, in this case. “It’s our core policy to keep friendly relationships with the operators,” he said. In China, each carrier uses a different technology and that requires Samsung “to tweak our smartphones to their request.”
“It’s not easy,” Shin said, “but we do this to be more operator friendly.”
Contrast that with the ongoing negotiations Apple has had with China Mobile, the largest cellphone operator. For years the two sides have been unable to come to an agreement on revenue sharing, effectively precluding Apple from hundreds of millions of potential customers.
Samsung’s reach extends higher than just the CEOs of the top state-owned telecom companies. Top executives have met each of the last several Chinese leaders, most recently Xi Jinping, who spent time in April with vice chairman Jay Y. Lee, son of K.H. Lee, Samsung Electronics chairman.
“What surprised me most,” said Lee later, “was that they (Chinese leadership) know very well about Samsung. They even have a group studying us.”
The Chinese government has also made clear it’s well aware of Apple – though not always in a good way. In April, state media bashed Apple for its “arrogance,” protesting among other things that its current 1-year service warranty was insufficient. Apple initially dismissed those criticisms, but Cook later apologized to Chinese consumers.
Samsung’s success in China has its roots, one former executive said, in a previous obsession for the company: its desire not to replicate the mistakes made by Japanese rivals.
Samsung spent a lot of time benchmarking Sony, Toshiba and Panasonic,” said Mark Newman, who spent six years in Samsung’s global strategy group and is now an industry analyst at Sanford C. Bernstein in Hong Kong.
“One of the things that came out of that is the realization that the insular approach has its drawbacks, and so Samsung has made an effort over the last 10 years to be much more global.”
This strategy of decentralization is plainly evident in China, he said, home now to more Samsung employees than any country outside South Korea.
Samsung now leads in both low-end and high-end segments in China, according to IDC, and its logic of going after both ends of the market is straightforward. In China, where the average wage is roughly $640 per month, many users looking to upgrade from feature phones to smartphones cannot afford Apple.
By bracketing the market with multiple models, Samsung can breed deep relationships with customers, many of whom, market research shows, trade up to more expensive models as they get older. Playing high and low also positions Samsung to fend off the intensifying competition from Chinese firms such as Lenovo and Huawei and literally hundreds of smaller local players.
“That’s where the next battle for Samsung will be fought,” said Newman. “We’ll have to see if Apple does introduce a new, cheaper model for China – and the world.”

DETAILS for the assesment of upcoming changes

1. Leapfrogging Apple while regaining only some high-end SoC supply to it:

Samsung sells 76 mln smartphones in Q2, boosting market share-report [Reuters, July 26, 2013]

Samsung Electronics Co Ltd sold 76 million smartphones in the second quarter, expanding its market share to 33.1 percent, Strategy Analytics said on Friday.

Overall, the global smartphone market grew 47 percent to a record 229.6 million, the research firm said.

Second-ranked Apple Inc saw its market share shrink to 13.6 percent after selling 31.2 million iPhones, as smaller rivals such as LG Electronics Inc, ZTE Corp and Huawei Technologies Co Ltd seized larger slices.

Strategy Analytics: Samsung Becomes World’s Most Profitable Handset Vendor in Q2 2013 [PRNewswire, July 26, 2013]

According to the latest research from Strategy Analytics, Samsung became the world’s most profitable handset vendor in Q2 2013. Apple slipped into second position, as margins have been hit by lackluster iPhone 5 volumes and tougher competition in China.

Neil Shah, Senior Analyst at Strategy Analytics, said, “We estimate Samsung’s operating profit for its handset division stood at US$5.2 billion [61% of the overall, see below] in the second quarter of 2013. Samsung overtook Apple for the first time, which recorded an estimated iPhone operating profit of US$4.6 billion. With strong volumes, high wholesale prices and tight cost controls, Samsung has finally succeeded in becoming the handset industry’s largest and most profitable vendor.”

Neil Mawston, Executive Director at Strategy Analytics, added, “Apple’s reign as the world’s most profitable handset vendor lasted almost four years, from Q3 2009 to Q1 2013. Apple’s profit margin for its handset division has been fading recently due to lackluster iPhone 5 volumes and tougher competition from rivals. Samsung is performing well in the US market, while Huawei, ZTE and other local brands are growing vigorously in China. Apple is now under intense pressure to launch more iPhone models at cheaper price-points or with larger screens to fend off the surging competition and recapture lost profits in the second half of 2013.”

Exhibit 1: Global Handset Operating Profits in Q2 2013  [1]

Global Handset Operating Profits (US$ Billions)

Q2 ’13





Source: Strategy Analytics

The full report, Samsung Becomes World’s Most Profitable Handset Vendor in Q2 2013, is published by the Strategy Analytics Wireless Device Strategies (WDS) service, details of which can be found here: http://tinyurl.com/cr7fhmb.

But: while handset revenue was up by 9% the operating profit for handsets and network products together were down by 3%. Considering that 97.3% of the IM (IT & Mobile Communications) revenue is for handsets that essentially means a similar operating profit drop of ~3% for handsets alone. Note as well that while the margin was 17.7% a year ago (in 2Q ’12) now (in 2Q ‘13) it was the same 17.7%, so with that 3% drop there was no fundamental problem (yet).
From: Earnings Release Q2 2013, Samsung Electronics, July 2013 presentation [July 26, 2013]


Samsung explains that by “marginal profit decline due to increased costs of new product launches, R&D and retail channels investments, etc.” as you could see below:


Fundamental problem could well be with the market share outlook, as neither for 2Q ‘13, nor for the outlook market share was talked about at all.


Samsung Electronics Announces Earnings for Q2 in 2013 [press release, July 26, 2013]

Samsung Electronics Co., Ltd. today announced revenues of 57.46 trillion won [$51.6B] on a consolidated basis for the second quarter ended June 30, 2013, a 9-percent increase from the previous quarter. Consolidated operating profit for the quarter reached 9.53 trillion won [$8.53B, ~61% of which is estimated for its handset division, see above], representing a 9-percent increase on quarter, while consolidated net profit for the same quarter was 7.77 trillion won [$6.98B].

In its earnings guidance disclosed on July 5, Samsung estimated second quarter consolidated revenues would reach approximately 57 trillion won [$51.2B] with consolidated operating profit of approximately 9.5 trillion won [$8.53B].

Samsung Regains Its Biggest Client Apple [The Korea Economic Daily, July 15, 2013]

Samsung Electronics will supply mobile application processor (AP) to Apple Inc. from 2015. The mobile AP is a brain of Apple’s iPhone. Samsung Electronics will supply 14 nano A9 chips that will be used for Apple’s iPhone 7.
Samsung Electronics had supplied the AP to Apple since 2007 but lost the contract to supply 20 nano AP A8 chips [for iPhone6] to Apple to Taiwan’s TSMC last year when it was engaged in patent disputes with Apple. Samsung Electronics developed state-of-the-art 14 nano models ahead of its rival TSMC, regaining the order from Apple.

According to industry sources on July 14, Samsung Electronics signed an agreement with Apple to supply the next-generation AP that it will produce in 2015. The AP that will be produced using 14 nano FinFET technology is mounted on Apple’s iPhone 7 to be released in the second half of 2015.

Since its relations with Samsung Electronics worsened due to patent disputes, Apple has refrained from using Samsung parts since the second half of last year. Apple excluded Samsung memory chips, including mobile DRAMs, from iPhone 5 that it released in September 2012. Apple also decided to procure iPhone 6 APs from TSMC, the world’s No. 1 foundry company.

TSMC reaches deal with Apple to supply 20nm, 16nm and 10nm chips, sources claim [DIGITIMES, June 24, 2013]

Taiwan Semiconductor Manufacturing Company (TSMC) and its IC design service partner Global UniChip have secured a three-year agreement with Apple to supply foundry services for the next A-series chips built using 20nm, 16nm and 10nm process nodes, according to industry sources.
In response, both TSMC and Global Unichip said they do not comment on customer orders and statuses.
TSMC will start to manufacture Apple’s A8 chips in small volume in July 2013, and substantially ramp up its 20nm production capacity after December, the sources revealed. The foundry will complete installing a batch of new 20nm fab equipment, which is capable of processing 50,000 wafers, in the first quarter of 2014, the sources said.
A portion of the upcoming production capacity, estimated at 20,000 wafers, can later be upgraded to process wafers used to build 16nm chips, the sources continued. TSMC is scheduled to volume produce the Apple A9 and A9X processors starting the end of third-quarter 2014, the sources said.
The upcoming Apple A8 processor will be found in a new iPhone [iPhone 6] slated for release in early 2014, and the A9/A9X chips will be used in the newer-generation iPhone and iPad products, the sources claimed.
The sources did not identify whether TSMC will be the sole supplier of these Apple-designed chips.
TSMC’s phase-4, -5 and -6 facilities of Fab 14, its 12-inch fab located in southern Taiwan, will be dedicated to making Apple’s A-series processors, the sources further noted. The foundry will initially allocate a capacity of 6,000-10,000 12-inch wafers for the manufacture of those chips, and output will rise gradually starting 2014, the sources said.
TSMC chairman and CEO Morris Chang remarked previously that the foundry’s 16nm FinFET process would enter mass production in less than one year after ramping up production of 20nm chips. Risk production for its 20nm process kicked off in the first quarter of 2013.

Samsung Electronics is the Biggest Beneficiary of LTE-A [Korea IT News, July 15, 2013]

Samsung Electronics has emerged as the biggest beneficiary of the commercialization of LTE-A services by all of the three South Korean telecom operators. This is because the Samsung Galaxy S4 LTE-A is the only LTE-A smartphone put on the market at the moment. Thus, sales of the Galaxy S4 LTE-A has a good chance of making up for slower than expected domestic sales of the Galaxy S4. LG Electronics and Pantech plan to launch their LTE-A smartphones sometime next month.

150,000 Galaxy S4 LTE-A smartphones were activated in 14 days with SK Telecom alone. In other words, an average of 10,000 Galaxy S4 LTE-A smartphones went into service a day. Sales of the Galaxy S4 LTE-A is much faster than the Galaxy S4, propped up by Samsung-SK Telecom joint marketing campaigns and growing expectations of LTE-A’s twice faster speeds [LTE=75Mbps –> LTE-A=150Mbps] than LTE.

Sales of the Galaxy S4 LTE-A is projected to surge in the weeks to come since LG and Pantech’s LTE-A smartphones are scheduled to come out as early as next month.

The world’s first LTE-A [SK telecom YouTube channel, June 25, 2013]

More information:
– SK Telecom Launches World`s First LTE-Advanced Network [press release, June 26, 2013]
World’s First Mobile Device with LTE Advanced Carrier Aggregation Powered by the Qualcomm® Snapdragon™ 800 Processor [OnQ Blog, June 26, 2013]
Qualcomm Snapdragon 800 Processors Power World’s First LTE-Advanced Smartphone [press release, June 26, 2013]
Samsung LTE Leadership and Future-Focused Innovation Produces World’s First LTE-Advanced Smartphone [press release, June 26, 2013]

From: 25 things my new Android phone does that makes my iPhone feel like it comes from the 1990s [ZDNet, July 11, 2013]

A few weeks ago, I told you about my plans to ditch my old iPhone 4S and get a brand-new Samsung S4 Android phone. Well, a few days later, I did just that.

  1. You can replace the battery
  2. You can add an memory card to your phone
  3. You can replace the back cover
  4. It supports wireless inductive charging without a bulky sled
  5. Wonder-of-wonders: you can actually plug a USB cable into it and drag and drop files from your computer
  6. It’s got a full 1080p HD display
  7. You don’t have to use iTunes
  8. You can completely replace your launcher
  9. Your home screen can be alive
  10. You can replace your unlock screen with a customized version
  11. It’s a frickin’ tricorder
  12. It supports near field communications (NFC)
  13. It has an IR emitter
  14. You can turn your phone into a stealthy TV-B-Gone
  15. The thing senses hand gestures above it
  16. It watches your eyes
  17. It has a 13 megapixel camera
  18. Its camera can remove objects that don’t belong in the image
  19. Its camera can take multiple images and composite them together automatically
  20. You can install apps from a browser on your PC
  21. It can show two apps on-screen at once
  22. You can automate almost everything
  23. When you buy something on the Google Play store, you get an email receipt within minutes, not weeks
  24. It integrates (mostly) nicely with Google Voice
  25. You can have a new hobby (whether you want it or not)
  • Samsung Galaxy S4 GT-I9500 [16GB] Factory Unlocked: $618 on Amazon ($700 list)
    – Exynos 5 Octa 5410 SoC with 2GB RAM
    – Quad-core 1.6 GHz Cortex-A15 & quad-core 1.2 GHz Cortex-A7 CPU with tri-core 533MHz PowerVR SGX544 GPU
  • Samsung Galaxy S4 GT-I9505 16GB 4G/LTE Factory Unlocked: $611 on Amazon($999 list)
    – Snapdragon 600 SoC with 2GB RAM
    – Quad-core 1.9GHz Krait 300 CPU with 450MHz Adreno 320 GPU

2. Chinese local brands are coming close to Samsung but at less than 40% price

Let’s take Jiayu* quad-core smartphone offerings as of July 15, 2013 in China (as they are the price leaders among the MT6589/MT6589T-based devices in China):
Jiayu G3 Quad Edition (G3s) is from $110 in retail shops throughout the country
(Note that this price is even lower than the spec-wise similar Xiaomi $130 Hongmi superphone.)
– Jiayu G4 Standard (on sale for $155 (thin) and $163 (thick) list price since April 10) now with summer offer is from $130 in retail shops throughout the country
1.5GHz Jiayu G4 Advanced (G4s) is $216 since July 6 with 7 working days delivery
1.5GHz Jiayu G4 thin version is $160 since July 13 with not later than July 24 delivery

* About Jiayu (佳域)

Baoji Jiayuyutong Electronic Co., Ltd was established in April 2009, is one of the high-tech enterprises, committed to the mobile communication product, research and development, manufacturing, sales and service. The company has more than 800 employees, including more than 30 R & D personnel and 60 engineering and technical people. At present, the company has 10 complete product lines, 2 laboratory rooms, a variety of advanced testing equipment.
Brand interpretation: “good domain”, the Chinese word for pioneering domestic smart phone “Best of the Realm”; “JIAYU” to “good domain” Chinese spelling.

Jiayu G3S quick review [nikchris69 YouTube channel, July 13, 2013]

Index: 0:00 : quick look on the external 0:52 : quick look at smoothness 1:30 : quick look at general settings, ram, etc 5:28 : quick look at camera settings 8:10 : quick look at lockscreen Jiayu G3S is my new phone, it comes from China. I bought that very cheap (200$/150€) and it also came with hands-free and a case. Here it is with the paid version of Nova Launcher. More videos of this phone will come soon.

Jiayu Store links: Jiayu S1, Jiayu G4 and Jiayu G3s (other link: Mobile Dad, July 13)image

Update: JiaYu S1 CNC machining process [Gizchina YouTube channel, Aug 6, 2013]

The JiaYu S1 is JiaYu’s first Snapdragon powered phone with a 1080 display. While we have seen this before from Chinese manufacturers it is nice to see that JiaYu are not only concentrating on the performance of the phone but are also ensuring the manufacturing quality is also spot on. In this video from the JiaYu factory we get to see the CNC manufacturing process of the S1’s stainless steel chassis.

imageYiayu S1 (see above) at 1.7GHz is on par with Samsung Galaxy S4 in performance:
according to the Antutu benchmark results at http://www.jiayu-store.com/blog/

Update: JiaYu S1 wireless charging demo Video [Gizchina YouTube channel, Aug 6, 2013]

The JiaYu S1 is nearing a launch date and as expected the company are releasing videos of the phone showing off some of the great built in functions. In this quick video we get to see the JiaYu S1’s wireless charging in action.

JiaYu G4 Hands On [Gizchina YouTube channel, May 13, 2013]

Here is a hands on video with the JiaYu G4 Basic [Standard]. The phone has a quad-core MT6589 1.2Ghz CPU, 1GB RAM, large 3000mAh battery [there is also a thinner version with 1850mAh battery], 13 mega-pixel rear camera and Android 4.2 Jelly Bean. In this video you will get a good look at the phone along with examples of video streaming, gaming and Antutu results.

3. The superphone segment of the market becomes saturated:

Smartphone slowdown could spell trouble in Taiwan [Reuters TV YouTube channel, July 9, 2013]

July 10 – With signs the high-end smartphone market in the developed world is at a near-term saturation point, Taiwanese chipmakers like TSMC may find once-assured profits are more fleeting than expected.

Samsung’s smartphone champ braves a tough crowd [Reuters TV YouTube channel, July 4, 2013]

July 5 – It’s not easy being J.K. Shin. The Samsung Electronics co-CEO has driven record quarterly profits and handset shipments, and yet investors are still displeased. Reuters’ Jon Gordon reports.

Samsung Confronts Saturated Smartphone Market [Bloomberg YouTube channel, July 5, 2013]

July 05 (Bloomberg) — Howard Lindzon, CEO and Co-Founder of Stocktwits, discusses the size of both Samsung and Apple, and the ability to move beyond the Smartphone. He speaks on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

Has Apple lost its cool factor? [CNNInternational YouTube channel, June 10, 2013]

A look at Apple’s declining fortune and what they need to do to regain luster. CNN’s Dan Simon reports.

China smartphone aims to rival Apple [Financial Times YouTube channel, Jun 25, 2013]

Chinese consumers have been clamouring to get their hands on a Xiaomi smartphone since its launch in 2011. Known as a Chinese rival to Apple, the low-cost phone has been held up as a model of Chinese innovation. The FT’s Leslie Hook talks the Xiaomi’s founder, Lei Jun, about investing in start-ups and growing his business.

China’s Huawei launches world’s slimmest smartphone [AFP YouTube channel, June 18, 2013]

Chinese telecoms giant Huawei launches what it says is the world’s thinnest smartphone, which it hopes will take on high-end rivals like Apple and Samsung in the global market. Duration:00:53

Huawei Ascend P6 — 2-Minute Encounter [HuaweiDeviceCo YouTube, June 18, 2013]

Meet beauty from outside in.

The rise of Chinese smartphones [CNN YouTube channel, May 30, 2013]

Kristie Lu Stout vistis Huawei’s headquarters for a look at how the company’s trying to take on Apple and Samsung. For more CNN videos, visit our site at http://www.cnn.com/video/

Google and Motorola’s Moto X (hands-on) [The Verge YouTube channel, Aug 1, 2013]

David Pierce takes an early look at the new Moto X and speaks with Motorola brass about the philosophies that went into the design of the phone and the company’s relationship with Google.

More information:
Moto X. All Yours. [The Official Motorola Blog, Aug 1, 2013]
Motorola Moto X vs. Samsung Galaxy S4 [Gizmag, Aug 2, 2013]
16GB Motorola Moto X to cost $575 SIM-free [GSMarena.com, Aug 2, 2013]

Motorola Moto X was unveiled yesterday and the smartphone will soon be available from the top 5 carriers in the USA. The 16 GB variant of the Moto X is priced at $200 and the 32 GB unit costs you $250 with a two-year contract.

At the announcement event Motorola did not announce the pricing details of the SIM-free editions, but they are no longer a mystery as AT&T has confirmed the pricing of the device without a contract. At launch, the 16 GB model of the Moto X will cost you $575, while the 32 GB is priced at $629.

Moto X – Motomaker [motorola YouTube channel, Aug 1, 2013]

Design your own Moto X. Over 2,000 ways to customize.

BBC News – Can Moto X revive Motorola’s fortunes? [BBCWorldNewsWatch YouTube channel, May 30, 2013]

Motorola has struggled to keep up in the fast-paced smartphone market, but now the company has announced that it will take on its rivals with a new handset named the Moto X. Can the company really compete against the likes of Apple, Samsung and HTC? The BBC’s Aaron Heslehurst spoke tech expert Stuart Miles, from Pocket-lint, to find out more about Motorola’s plans.

Moto X Phone release date, news and rumours [TechRadar YouTube channel, July 2, 2013] “could be landing in installs in October”,  and “to undercut the big players of the market such as the Samsung Galaxy S4 and the HTC One –meaning we might see some very competitive pricing

All the latest rumours surrounding the highly-anticipated Motorola X Phone.

From: Samsung Electronics 2Q13 review: Fading growth momentum vs improving valuations [The Korea Economic Daily, July 8, 2013]

Samsung Electronics (Samsung) announced 2Q13 preliminary sales of W57trn [$51B] and OP of W9.5trn [$8.5B], a record quarterly high. However, OP fell short of the consensus (W10.2trn) by 6.5% and our estimate (W10trn) by 5%. Despite strong memory prices due to supply shortages and higher OLED sales and margins, OP disappointed on lower smartphone ASP and IM margins due to increased marketing costs.
As the growth of the smartphone market slows due to commoditization, concerns are mounting over eroding ASP and margins. In fact, we estimate OP at the IM division eroded from W6.51trn with an OPM of 19.8% in 1Q13 to W6.23trn [$5.6B] with an OPM of 18.4%. Considering Apple lawsuit provisions were booked in 1Q13, the effective decline in OPM is over 3% as sales of the Galaxy S3 and Note 2 deteriorated.

We revise down our earnings forecasts to reflect lower handset OPM. Specifically, we estimate 3Q13 OP at W10.1trn [$9B] (previously W11.0trn) and full-year 2013 OP at W38.1trn [$34.2B] (previously W40.3trn). We cut Galaxy S4 3Q13 sales to 20mn units (previously 23mn) to reflect the poor sales; however, we maintain OP and OPM at 2Q13 levels given the global launch of the Galaxy S4 Mini and Note 3.

*Source: Korea Investment & Securities Co.

From: Galaxy S4, 20 million sales in just two months … 40 days faster than the previous [ChosunBiz, July 3, 2013] as traslated from Korean by Google and Bing with manual edits

Samsung Electronics (005930) launched the Galaxy S4 20 million sales in two months (on the carrier supply basis) of the fastest selling Samsung smartphones ever, according to industry.
The Galaxy S4  was released only two months ago by the end of June, and the carrier supply sales exceeded 20 million.
When this morning president JK Shin of Samsung Mobile met with reporters in Samsung Electronics Seocho building in response to a question whether the amount of Galaxy S4 sales would be 20 million he told “You know, there are”, and this is a 20 million breakthrough.
Since the official launch of the Galaxy S4 on the 26th of April  in 60 countries 4 million were sold in just five days, then went on to sell 10 million units in a month.

… On the other hand a Samsung official said, “as regards the Galaxy S4 sales numbers there is no answer”.

From: Analyst: Samsung Galaxy S4 Sales vs. Apple iPhone 5 Sales [Wall St. Cheat Sheet, July 7, 2013]

Although the Galaxy S4 has sold faster than any other Samsung device, it appears that it still couldn’t surpass the sales rate for the iPhone 5. Citing the slowing demand for the Galaxy S4, a mid-June report from J.P. Morgan lowered the 2013 earnings estimate for Samsung by 9 percent. After the report was released, Samsung lost $12.4 billion in market capitalization, falling to $187.8 billion.

Samsung analysts ask hard questions as S4 marketing charm wears off [Reuters, June 16, 2013]

(Reuters) – Analysts fell under Samsung Electronics Co Ltd’s marketing spell when they made what they now admit were hopelessly optimistic forecasts for its smartphone sales.

Samsung’s huge share of the high-end smartphone market also persuaded some analysts to downplay industry data pointing to a fast-saturating segment, a reality that is already eating into sales of Apple Inc’s iPhone 5.
Woori Investment & Securities, one of South Korea’s largest securities firms, cut its outlook for Samsung’s earnings and target share price on June 5. It was the first to adjust its view.
A massive wave of downgrades has since followed, with forecasters including JPMorgan, Morgan Stanley and Goldman Sachs taking a harder look at their assumptions of how well the S4, Samsung’s latest Galaxy smartphone, would actually do.
Sales estimates for the S4 were slashed by as much as 30 percent, stirring investor concerns over Samsung’s mobile devices division – the company’s biggest profit generator.
Investors in the South Korean IT giant have paid dearly. Samsung lost nearly $20 billion in market value in a week as shares plunged following the downgrades.
“I’d say most forecasters including myself had this conviction that they’ll outperform again – because it’s Samsung,” said Byun Hanjoon, an analyst at KB Investment & Securities. “They had beaten expectations before, which led many to believe they are bound to excel again with the S4.”
The S4 sold 10 million sets in just one month of its debut in late April, outperforming its predecessor, the S3.
Yet analysts now say the high-end smartphone segment is slowing, citing lacklustre prospects in Europe and South Korea in particular.
The S4, in reality, also lacks any real wow factor, they say.
“The Street, including Goldman Sachs, admittedly extrapolated the first-quarter earnings momentum through the year,” Goldman Sachs analyst Michael Bang said in a report. “This resulted in very optimistic earnings expectations.”
Most analysts have reduced their estimates for S4 shipments to around 7 million units a month from their previous average expectation of 10 million.
Bank of America Merrill Lynch has lowered its S4 sales estimate for this year by 5 million to 65 million units.
Some analysts say a loss in potential sales of 5 million S4 units would cut around $1 billion of Samsung’s operating profit.
“S4 sales are solid. It’s just that some analysts had higher expectations and then they lowered them,” J.K. Shin, head of Samsung’s mobile devices division, told reporters last week.
Over the past month, 17 out of 43 analysts have downgraded their earnings estimates for Samsung, leading to a 0.6 percent drop in their average forecast for the company’s April-to-June earnings to 10.4 trillion won ($9 billion), according to Thomson Reuters StarMine.
The lowered forecast, however, would still be a quarterly record.
Many analysts say weaker-than-expected S4 sales will not necessarily stop Samsung from posting record quarterly profits. The company has diversified into many segments of the smartphone market, Merrill Lynch says.
Still, the scale of the downgrades has cast a shadow on Samsung’s dominance in the $250 billion smartphone market.
Doing it no favour, Chinese rivals are aggressively growing their market share, aided by strong sales of mid-tier models – a segment in which Samsung has relatively weak positioning, according to analysts.
The mid-tier segment accounted for less than 15 percent of Samsung’s total shipments last year.
Analysts say Samsung has to focus on this lower tier in the medium term.
The high-end segment is losing momentum, with manufacturers struggling to differentiate themselves and consumers calling for a leap in innovation, they say.
To be sure, Samsung has not sat idle.
It has gradually expanded its offerings. Among four varieties of the S4 introduced in recent weeks, there was one stripped-down version called the Galaxy Mini.
By comparison, Apple has had no new offerings since the iPhone 5 hit the market in September last year.
Samsung bulls are also pinning their hopes on product launches later this year including the Galaxy Note 3, a phone-tablet hybrid.
Some analysts say conservative forecasts will prevail.
Expectations for innovation have been lowered, and I don’t think there’ll be as much buzz surrounding new product launches as it used to be,” said Byun at KB.
Samsung’s stock, which slumped to a six-month low on Thursday, inched up 0.9 percent on Friday.
($1 = 1134.4000 Korean won)
(Reporting by Miyoung Kim; Editing by Ryan Woo)

Samsung GALAXY S4 Hits 10 Million Milestone in First Month [Samsung Mobile Press, May 23, 2013]

Samsung Electronics Co., Ltd. today announced that global channel sales of its GALAXY S4, a life companion for a richer, fuller, simpler life, has surpassed 10 million units sold in less than one month after its commercial debut. Launched globally on April 27, the phone is estimated to be selling at a rate of four units per second.

The GALAXY S4 sets a new record for Samsung, generating sales quicker than any of its predecessors. Sales of the GALAXY S III reached the 10-million mark 50 days after its launch in 2012, while the GALAXY S II took five months and the GALAXY S seven months to reach the same milestone.

“On behalf of Samsung, I would like to thank the millions of customers around the world who have chosen the Samsung GALAXY S4. At Samsung we’ll continue to pursue innovation inspired by and for people,” said JK Shin, CEO and President of the IT & Mobile Communications Division at Samsung Electronics.
The GALAXY S4 was developed to enhance the meaningful moments in our lives through its innovative features and superior hardware. It has the world’s first Full HD Super AMOLED display that showcases images at their very best on a 5-inch screen with 441ppi. Equipped with a powerful rear 13MP camera, the GALAXY S4 also boasts a Dual Camera function that allows simultaneous use of both front and rear cameras. The GALAXY S4’s new and innovative software features include Air View and Air Gesture for effortless tasks, while it also keeps users up-to-date with information about their health and wellbeing using S Health.
Samsung GALAXY S4 is available in more than 110 countries and will gradually be rolled out to a total of 155 countries in cooperation with 327 partners.
Samsung is planning to introduce more color variations to meet various consumer tastes and preferences. In addition to the currently available Black Mist and White Forest, new color iterations will be added this summer, including Blue Arctic and Red Aurora, followed by Purple Mirage and Brown Autumn.
* All functionality, features, specifications and other product information provided in this document including, but not limited to, the benefits, design, pricing, components, performance, availability and capabilities of the product are subject to change without notice or obligation.
** Availability of colors will vary depending on the country and carrier/retailer.

Is Samsung’s Growth at the Expense of Apple? [Bloomberg YouTube channel, April 26, 2013]

April 26 (Bloomberg) — Samsung captured a third of the global smartphone market in the first quarter as growth for Apple’s iPhone dropped to its slowest pace ever, according to data released by Strategy Analytics. Strategic Analytics Senior Strategist Neil Shah speaks with Emily Chang reports on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg) — For more “Bloomberg West” videos: http://bloom.bg/LIZpfr

4. Previous (pre-saturation) milestones according to
Samsung Mobile Press (with relevant video inserts from other sources):

See: Samsung GALAXY S II reaches 3 Million global sales [July 3, 2011]

From: Samsung GALAXY S II reaches new heights with 5 million global sales [July 28, 2011]

Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the Samsung GALAXY S II (Model: GT-I9100) has passed the 5 million global sales milestone.
The GALAXY S II is Samsung’s flagship smartphone device; a beautifully thin, (8.49mm) and lightweight dual-core smartphone that combines an unmatched Super AMOLED Plus viewing experience with incredible performance, all on Android – the world’s fastest-growing mobile operating system. The next generation smartphone also includes exclusive access to Samsung’s four new content and entertainment hubs, seamlessly integrated to provide instant access to music, games, e-reading and social networking services.
The 5 million mark has been reached in just 85 days, a rate which is 40 days faster than the original GALAXY S took to reach the same sales mark. This rate is set to accelerate as Samsung has just launched GALAXY S II in China, the world’s largest market.


From: Samsung GALAXY S II continues success reaching 10 Million in global sales [Sept 26, 2011]

Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the Samsung GALAXY S II (Model: GT-I9100) has achieved 10 million global channel sales, doubling from five million in just eight weeks.

The GALAXY S II is Samsung’s flagship smartphone device – a beautifully thin (8.49mm) and lightweight dual-core smartphone that combines an unmatched SuperAMOLED Plus viewing experience with powerful performance, all on Android, the world’s fastest-growing mobile operating system. The next generation smartphone also includes Samsung’s four content and entertainment hubs, seamlessly integrated to provide instant access to music, games, e-reading and social networking services.

Samsung celebrates 30 million global sales of GALAXY S and GALAXY S II [Oct 17, 2011]

Samsung Electronics Co., Ltd, a leading mobile handset provider, today announced that its Samsung GALAXY S and GALAXY SII smartphones have achieved a combined total of 30 million global sales.
GALAXY SII has set a new record for Samsung, generating more than 10 million sales – quicker than any device in Samsung’s history. The device also recently received five out of the total ten Mobile Choice Consumer Awards 2011 in the UK as well as 2011 Gadget Award for being chosen as the best smartphone of the year by T3, confirming it as a run-away favorite smartphone with consumers this year. It continues to gain traction as Samsung’s flagship smartphone – a stylishly designed, slim and ultra-portable device combining an unrivalled viewing experience with powerful dual-core processor performance.
Launched in 2010, Samsung GALAXY S reached almost 20 million unit sales, making it the highest-selling mobile device in Samsung’s portfolio to date, and another record-breaker for the company and the mobile market.
Since launching to high critical acclaim two years ago, the GALAXY S range has continued to gain popularity among consumers and propelled the GALAXY brand to one of the most recognized mobile brands in the world, with Samsung now the largest Android smartphone vendor and the second largest phone vendor overall worldwide (IDC).
“Since its launch only five months ago, GALAXY SII has seen tremendous sales success and garnered enthusiastic reviews from consumers and mobile industry watchers across the globe. This is in addition to the continued sales momentum behind GALAXY S, which we launched at Mobile World Congress 2010 as continues to be a run-away success with consumers,” said JK Shin, President and Head of Samsung’s Mobile Communications Business.
“The phenomenal success of these smartphones once again demonstrates how the GALAXY S smartphones is setting the standard for smart mobile technology around the world.”

From: Samsung GALAXY S II awarded “Best Smartphone” by GSMA at Mobile World Congress 2012 [Feb 29, 2012]

This honor comes in recognition of the device’s powerful performance and overwhelming response from consumers. GALAXY S II, Samsung’s flagship smartphone, achieved worldwide sales of over 10 million units in only 5 months, quicker than any device in Samsung’s history and surpassed over 20 million sales in 10 months.

With SIII, Samsung makes smartphone duopoly official – Tech Tonic [Reuters TV YouTube channel, June 21, 2012]

From: Samsung GALAXY S III Reaches 20 Million Sales Milestone in Record Time [Sept 6, 2012]

Samsung Electronics Co., Ltd, a global leader in digital media and digital convergence technologies, today announced that the GALAXY S III smartphone has achieved 20 million unit sales in just 100 days since its debut in May 2012. As Samsung’s most successful smartphone to date, the GALAXY S III has set a new record, generating sales quicker than any of its predecessors.

From: The Samsung GALAXY S III achieves 30 million sales in five months [Nov 4, 2012]

Putting this number into perspective, during a similar selling period (150 days), the acclaimed GALAXY S II, launched in 2011, globally sold 10 million devices.

Now upgradable to Android™ 4.1 (Jelly Bean)*, the nature-inspired GALAXY S III is a revolutionary smartphone packed with intelligent features that make everyday life easier. Its expansive 4.8-inch HD Super AMOLED display lets users view multimedia and web content in brilliant color and clarity; and its camera understands human gestures to make using the phone incredibly natural and intuitive. A powerful hardware ensures blazing-fast performance and seamless multi-tasking.

* Availability and timing of the Jelly Bean upgrade will vary depending on the country and mobile carrier.

Samsung GALAXY S Series Surpasses 100 Million Unit Sales [Jan 14, 2013]

    • Samsung has announced that global channel sales of the company’s flagship smartphone, GALAXY S III and its two predecessors GALAXY S and GALAXY S II have surpassed 100 million units sales as of January 13, 2013.
    • Samsung GALAXY smartphones are intuitive and easy to use, display photos and videos on dazzling screens, and deliver a premium user experience with a design that is elegant and feels natural.
    • The GALAXY S, has reached over 24 million global channel shipments, achieving 10 million of these during the first seven months after its launch in June 2010.
    • Building on this success Samsung launched the GALAXY S II in April 2011. This smartphone reached around 40 million shipments, achieving 10 million global channel sales in just five months.
    • In May 2012, Samsung unveiled the GALAXY S III – a smartphone designed for humans and inspired by nature. It revolutionized the user experience, and was critically acclaimed, achieving 20 million global channel sales in just 100 days – which made it Samsung’s fastest selling smartphone yet.
    • GALAXY S III has now passed the mark of 40 million unit channel sales.

How Did Samsung Come to Rule Smartphones? [Bloomberg YouTube channel, March 14, 2013]

March 14 (Bloomberg) — Bloomberg West Editor-at-Large Cory Johnson examines how Samsung came to build its smartphone business as it takes aim at Apple’s iPhone with today’s launch of the Galaxy S4. He speaks on Bloomberg Television’s “In The Loop.” — Related Story: http://bloom.bg/ZNshKu — For more “In the Loop” videos: http://bloom.bg/LbOTQk


  1. […] ← Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are a… […]

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