Bloomberg News

Samsung Says Demand for New Galaxy S4 Stronger Than Anticipated

April 24, 2013

Galaxy S4’s U.S. Debut Pushed Back Because of Shipment Delay

A Samsung Electronics Co. Galaxy S4 smartphone is held for a photograph in Times Square in New York. Photographer: Michael Nagle/Bloomberg

Samsung Electronics Co. (005930) said demand for its flagship Galaxy S4 device is stronger than expected after two top U.S. wireless carriers pushed back their release dates, citing shipment delays.

“Pre-order demand is much stronger than expected, so it’s difficult to rapidly boost supply in the short term,” Lee Don Joo, president of the strategic marketing office at Samsung’s mobile business, said today during a company event in Seoul. Samsung, the world’s largest maker of smartphones, will release the handset tomorrow in South Korea and on Saturday in other markets around the world, Lee said.

The constraint is contributing to a slow start for the device in the U.S., where Samsung wants to supplant Apple Inc. as the top-selling smartphone maker. Verizon Wireless, the nation’s largest carrier, doesn’t plan to make the Galaxy S4 available until May 30. The staggered rollout differs from Apple’s tightly controlled iPhone releases and may present challenges in promoting the Galaxy. Samsung was unchanged in Seoul trading.

“Ideally you want to get everything into that launch window at the same time -- and at the same exact hour -- to get maximum impact,” said Avi Greengart, a Teaneck, New Jersey- based analyst at Current Analysis. “Let’s give them credit, though, this is a massive logistical challenge. If one or two slip, it isn’t a terrible problem, assuming they can address this issue in the next few weeks.”

Tepid Reception

The restricted supply kept the device from going on sale as planned yesterday on T-Mobile USA Inc.’s website, and Sprint Nextel Corp. (S:US) also pushed back its on-sale date, with both citing unexpected delays in inventory. While Sprint still plans to start selling the phone online on April 27, retail stores and other channels will offer the devices when inventory becomes available, the carrier said, without setting a new release date.

The phone is getting a tepid reception from reviewers, which may hinder Samsung’s ability to build a buzz around it. AllThingsDigital’s Walt Mossberg said the Galaxy S4 software is “especially weak,” while Bloomberg News’s Rich Jaroslovsky called the Galaxy S4 “soulless.”

“Several of its advanced features don’t work very well, and it feels more like a collection of functions than a smoothly integrated experience,” Jaroslovsky wrote in his review.

David Pogue at the New York Times said Samsung was “playing it safe” with the model: “Nobody at the office will notice that you’ve bought the latest and greatest.”

Other reviewers were more favorable, including Mashable’s Christina Warren, who called the product the best smartphone based on Google Inc.’s Android software.

Verizon Orders

Verizon plans to begin taking pre-orders for the Galaxy S4 today, ahead of its May 30 debut in stores, said Brenda Raney, a spokeswoman for the Basking Ridge, New Jersey-based company.

Mark Siegel, a spokesman for Dallas-based AT&T, said the company doesn’t anticipate any delays either.

“We are excited to hear what our customers think of this highly anticipated smartphone,” Siegel said.

Samsung also is expanding its store-within-a-store retail strategy, part of an effort to boost U.S. sales.

The company is opening 1,400 mini-stores in Best Buy Co.’s U.S. locations. It’s also upgrading store displays for its smartphones, tablets and TVs in about 4,000 retail locations. Samsung declined to say how much it was spending on the effort.

“It is centered on the notion that consumers want to understand the relationships between these products,” Tim Baxter, president of Samsung Electronics America, said in an interview at a Best Buy store in New York. “We haven’t yet brought those solutions to customers in a way that makes those purchase decisions easier.”

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Jungah Lee in Seoul at jlee1361@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net; Michael Tighe at mtighe4@bloomberg.net


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