IPhone-Like Hype Builds for Samsung

When a Samsung Electronics Co. 005930.SE +0.68% executive showed off a new chip at the Consumer Electronics Show in Las Vegas last week, he created a flurry of news coverage for a completely different product—the company's next top-of-the-line smartphone.
For about four months, gadget bloggers along with tech writers at South Korean newspapers have tried to uncover the details of Samsung's next high-end smartphone, likely to be called Galaxy S IV after consecutively numbered versions over the past three years.

Enlarge Image

Bloomberg

Samsung's Galaxy S III

Related Video

Apple's iPhone 5 sales were very strong in December but with the stock down 28 percent over the past few months investors and analysts are left with the question whether those sales numbers are going to drop in the upcoming months. MarketWatch's Dan Gallagher reports. (Photo: Getty Images)

They have suggested it will have a bigger screen, thinner case, come with a pen, have no buttons and, of course, have a faster chip to run it, as well as better battery life. Some reports back in November suggested the new phone would have an unbreakable screen, and others have said it would be waterproof.
Pictures of invitations to a March press event in South Korea have even circulated on some websites.
It all adds up to iPhone-like hype for Samsung, which last year passed Apple Inc. AAPL -0.67% as the world's top seller of smartphones by units.
While its product releases haven't sparked nearly the kind of fervor seen at Apple's iPhone launch events, Samsung is proving to be a formidable challenger at the top of the mobile-device market.
Its Galaxy S III phone, which launched in May and uses Google Inc.'s GOOG -0.54% Android software, is considered by many potential buyers to be the first phone to meet or surpass the iPhone's attractions.
Anchored by improvements in the Android software, Samsung made the phone's screen larger than the iPhone, enhanced its resolution and used a plastic case to reduce its weight compared with earlier versions. The Galaxy S III, however, is still slightly heavier and thicker than the iPhone 5.
Samsung executives have declined to answer questions about the upcoming version—not even when the phone will emerge, though observers believe the company will keep with past practice and roll out the new model in April or May.
"We are going to share the details of the product launch once it's finally ready and confirmed," the company said in a statement.
Samsung earlier this week said it had shipped more than 100 million Galaxy S smartphones since the first one was revealed in 2010. That amount includes 40 million each for the S II and S III models.
While such phones comprise the high end of Samsung's product lineup, about half of its smartphone sales are less powerful and less expensive models.
A year ago, speculation for Galaxy S III turned feverish in January, ahead of a European tech trade show in February where Samsung was expected to unveil that new model. Instead, it unveiled the device at a news conference in London in May. That month, the phone hit European and Middle Eastern markets and then more broadly to other countries including the U.S. by July.
"There's definitely more attention this time," said Brian Klug, smartphones editor at Anandtech.com, a U.S.-based gadget site. "With each Galaxy S, there's been more."
His site reported earlier this week that the new phone would have a 4.99-inch screen, up from the 4.8-inch screen of the current Galaxy S III, and will display full, high-definition video. Samsung asked the site to remove a photo taken at CES last week that showed the rising sizes of its phone displays, Mr. Klug said. Samsung declined to comment on why it asked for the removal.
At the trade show, Samsung's president of mobile chips, Stephen Woo, revealed a new design for cellphone processors that has eight processing cores, four powerful ones and four that are less powerful for simpler tasks. The less-powerful cores take charge during routine functions, consuming less power and extending battery life.
The revelation led many tech journalists to speculate that the chip, called the Octa, will be at the heart of the Galaxy S IV phone.
"Samsung makes its own components so whenever those guys say something about a new product, the question arises, is that going to be in the next Galaxy?" said Gareth Beavis, an editor at Techradar.com, a U.K.-based site. "It's quite easy to make that jump."
But all the hype is a double-edged sword for Samsung. While it shows the company is approaching the Apple-like status its executives have craved, it also creates the risk that customers will postpone purchases of Samsung phones in the next few months while they wait for Galaxy S IV.
Apple executives have acknowledged this phenomenon in the past year regarding its products. "Our weekly iPhone sales continue to be impacted by rumors and speculation regarding new products," said Apple Chief Financial Officer Peter Oppenheimer on the company's third-quarter conference call in July ahead of the iPhone 5 release.
Apple sold 26 million iPhones in that quarter, down from 35.1 million in the prior three months.
Apple CEO Tim Cook repeated this sentiment amid a slowdown in iPad sales in the fourth quarter. "It's clear that customers delay purchases of tablets due to new product rumors," he said in October.
Rumors could also tee up expectations that Samsung, which popularized bigger screens in smartphones with the Galaxy S III, will have more innovative tricks up its sleeve.
Samsung, as one of many Android phone makers, doesn't have the level of customer loyalty that Apple does.
"It does need to keep up the level of innovation," Mr. Beavis said. "I think it's still the underdog."