Samsung Galaxy S III is taking innovation to another league but how big is its potential market?

Yesterday, Samsung introduced the third generation of its flagship smartphone brand, the Galaxy S III. The phone will be branded as the official 2012 Olympics phone. This device belongs to the super-phone category of smartphones which also includes HTC One X, the forthcoming iPhone 5 and LG Optimus 2X. According to Informa Telecoms & Media, the super-phone market will generate above 50 million units in terms of sales by the end of 2012. Galaxy S III will certainly enable Samsung to reinforce its position as the leading vendor in this market. It will also enable the South Korean consumer electronics giant to maintain its leadership as the dominant Android manufacturer, with an estimated one-third market share by end of 2012 (see graph). 

What is unique about the Galaxy S III is the level of intelligence Samsung has created around its embedded features and sensors which takes smartphone innovation into another league. The device’s features are capable of communicating with each other and sharing information, enabling it to react intuitively and automatically to an action taken by the user. For example, the phone can recognise a face in a picture taken with the camera and will associate it with a contact saved in the address book. The phone will then automatically save the picture in a relevant file (e.g. family, friends, colleagues), tag it, and suggest you should upload it to facebook or Twitter.

While the Galaxy S III will be highly desirable for enthusiastic and advanced users, Samsung will have to build on the already popular Galaxy brand and push it hard to various distribution channels before the iPhone 5 is launched. However, Samsung will find it hard to convince and educate the typical mobile phone user to adopt and use all the advanced experiences enabled by this phone. In this specific segment, Samsung Galaxy S III is unlikely to meet with great success, at least in the early stages after launch.

The casing of the Galaxy S III is another weakness, as it’s based on the usual plastic casing found in most of Samsung’s phones and doesn’t do justice to the device’s impressive features. Samsung needs to learn from the likes of Nokia and Apple which use high-quality materials and the best designs for casing their premium devices.

Galaxy S III could, potentially, also cannibalize sales of some of its popular smartphones including Galaxy Note, Galaxy S II, and Galaxy Nexus. Therefore, Samsung will have to come up with a well-structured price segmentation, where Galaxy S III addresses the premium price points while the existing Galaxy devices enter the lower price points to widen the audience of the overall Galaxy brand.


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