Bloomberg News

Samsung Starts Galaxy S4 Sales in Latest Challenge to Apple

April 26, 2013

Samsung Starts Galaxy S4 Sales in Latest Challenge to Apple

An event employee, right, helps a member of the media during a launch event for Samsung Electronics Co. Galaxy S4 smartphones in Seoul on April 25, 2013. Photographer: SeongJoon Cho/Bloomberg

Samsung Electronics Co. (005930) began selling the Galaxy S4 smartphone today, releasing its new flagship model in the company’s home market of South Korea before a global rollout to challenge Apple Inc. (AAPL:US)’s iPhone.

The handset, which faces limited supply as Samsung struggles to keep up with early orders, also starts sales in Hong Kong today, while outlets in Australia and the U.S. will begin selling it tomorrow.

The S4, with a 5-inch screen and 13-megapixel camera, is thinner and lighter than its predecessor and also includes new software that responds to gestures and facial movements. Kim Sang Soo, 35, bought the S4 at an SK Telecom Co. store in Seoul, opting for the device over Apple’s handset released last year.

“The biggest issue for me with the iPhone was a short battery life and slow Internet,” said Kim. “Why Galaxy S4 over the previous one? Because it’s the newest.”

Samsung, which reported record profit today, is counting on the Galaxy S4 to help it extend a lead in the global smartphone market.

The Suwon, South Korea-based company captured a third of the market in the first quarter, with shipments of smartphones surging 56 percent to 69.4 million units in the three months ended March 31, according to data released by Strategy Analytics.

Apple iPhone shipments rose 6.6 percent to 37.4 million units in the period, the slowest pace ever.

Samsung’s sales have been so strong that the company, which supplies more than half the mobile dynamic random access memory chips used to run smartphones, may buy the semiconductors from rival SK Hynix Inc. (000660) to keep up with demand.

High Demand

“With the flagship Galaxy S4 model likely to be in high demand, provided there are no major component shortages, Samsung should continue to deliver strong smartphone volumes,” Neil Mawston, executive director of Strategy Analytics, said in an e- mailed statement.

Limited supplies and delays in getting inventory into stores led two top U.S. wireless carriers to push back their release dates.

“Some countries are seeing supply shortage in the initial launching stage because of stronger-than-expected global orders,” Kim Hyun Joon, vice president of Samsung’s mobile communications business, said today. “The situation will ease soon.”

U.S. Delays

The restricted supply kept the device from going on sale as planned on T-Mobile USA Inc.’s website. Sprint Nextel Corp. (S:US) also pushed back its on-sale date, with sales online starting today, while retail stores will offer the handset when inventory becomes available, the carrier said.

Verizon Wireless, the largest U.S. carrier, doesn’t plan to make the Galaxy S4 available until May 30. The staggered rollout differs from Apple’s tightly controlled iPhone releases.

The phone is getting a mixed 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.”

David Pogue at the New York Times said Samsung was “playing it safe” while Mashable’s Christina Warren called the S4 the best smartphone based on Google Inc.’s Android software.

To contact the reporter on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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