Can Apple’s new iPhone recapture tech giant’s glory?

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Can Apple’s new iPhone recapture tech giant’s glory?
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Can Apple’s new iPhone recapture tech giant’s glory?

Apple releasing new iPhone on Sept. 10; Samsung recently announced Galaxy
Note 3

By Andre Mayer, CBC News, September 9, 2013

The market research firm Gartner reports that while iPhone sales went up
from 2012 to 2013, Apple nonetheless lost market share in that time. (Jacky
Naegelen/Reuters)

The tech world has been speculating feverishly about the upcoming launch of
Apple’s latest iPhone, but analysts say that regardless of what the company
unveils on Tuesday, Apple is unlikely to unseat current
smartphone market leader Samsung.

“Will they catch up [to Samsung]?” says John Pliniussen, professor of
innovation and internet marketing at Queen’s School of Business in Kingston,
Ont.
“Never – unless they come out with something that’s a paradigm shift from
the current smartphone. And I can’t imagine what that is.”

Apple is gearing up for a launch event at Apple Campus in Cupertino, Calif.,
on Sept. 10. As with most Apple product launches, the actual substance of
the
presentation remains under wraps, but industry watchers expect the company
to present a new iteration of its iPhone, the 5S, as well as a more
affordable
version called the 5C.
Photos of new iPhone leaked – again

Pliniussen says there has been talk that Apple could introduce new
fingerprint-recognition technology, which would be more secure than the
iPhone’s
current password system. It would also make things like online shopping and
banking on a phone – anything that currently requires a password – more
convenient.

The invitation to the Apple event features an array of vibrantly coloured
circles and the slogan “This should brighten everyone’s day,” which many
have
taken as a clue that the company is also planning to release its new iPhone
in a wider assortment of colours.
Hugues de la Vergne, principal analyst in consumer technology for Gartner,
doesn’t expect “any near-term wow features” from the upcoming Apple launch.
He thinks that Apple is likely working on an assortment of screen sizes,
improving resolution and enhancing battery life.

Dwindling market share
While Apple still enjoys a reputation for creating game-changing technology,
it has been losing market share in the smartphone space to South Korea-based
Samsung, as well as other Asian competitors that use the Google Android
operating system.

According to the latest figures from Gartner, Apple’s share of the worldwide
smartphone market has shrunk four per cent since 2012. Samsung currently
commands 31.7 per cent of worldwide smartphone sales, compared to Apple’s
14.2 per cent.
This is a far cry from six years ago, when Apple revolutionized the
smartphone with must-have hardware. The first iPhone, which came out in
2007, was largely
seen as game-changer in terms of its design and functionality. But that put
Apple squarely in the cross-hairs of competitors. The 12 to 18
months following its release saw a flurry of “novel and exciting”
smartphones from companies such as Samsung and LG, says Kaan Yigit,
president of the Solutions Research Group in Toronto.

Samsung smartphones have had greater success in emerging markets such as
China and India because of their affordability, analysts say. (Lee
Jae-won/Reuters)Since then, this market category has matured significantly,
to the point where almost all of the products more or less do the same
thing, Yigit
says.

“For the average consumer, what are they doing with the device? They’re
taking their kids’ pictures, emailing or putting them on Facebook, texting,
calling,” he says.
Because these features have become standard on smartphones, “it’s difficult
to get people excited” about incremental upgrades, Yigit says.

One of the reasons that Samsung has managed to remain the market leader,
says de la Vergne, is that it offers consumers a wide variety of screen
sizes. Its
current offerings include the Ace IIe (3.8-inch display) and the Galaxy S4
(five inches). Last week, Samsung revealed details about the Galaxy Note 3
(5.7 inches), which is seen as a hybrid of a phone and tablet (or
“phablet”).

Apple has largely stuck with the same screen size, making the iPhone 5 (four
inches) only marginally larger than its predecessors (3.5 inches).

Tapping emerging markets
Another reason Samsung has been able to outdistance Apple is because of its
lower pricing and penetration into huge markets such as China and India,
says
Plinuissen.
There are indications, however, that Apple is making a more concerted push
into China, where the iPhone has seen lacklustre sales compared to
lower-priced, Android-equipped devices made by companies such Samsung,
Lenovo and LG.
Media reports suggest Apple is close to signing a deal with China Mobile, a
telecom with 700 million subscribers.

Apple’s Beijing event stirs talk of China breakthrough
If Apple does indeed come out with a less expensive device, it would be
primarily aimed at such emerging markets, says de la Vergne.
“I think it has the potential to be significant for Apple. These are markets
where they’ve been priced out of the majority of the market. A good piece of

that market has gone to Samsung and Android [products] in general.”
Then again, signing a deal with China Mobile in 2009 has done little to
reverse the fortunes of Canadian smartphone maker BlackBerry.

Pliniussen says that Apple still has the ability to wow consumers, but at
this stage of the game, it’s no longer enough.
“Can Apple be number one in terms of the coolest technology? Yes. The
coolest
colours? Yes. The coolest gizmos? Yes. Will that translate into the biggest
sales? No, because sadly, the majority of the world doesn’t give a shit
about that,” says Pliniussen.

“The majority of the world wants access and basic features.”

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