Mar 152013

Philip Elmer-DeWitt posted a roundup of analyst chatter following the launch of Samsung’s Galaxy S 4 last night in New York. What you’ll see is the typical mixed bag of ennui and batshit insanity. Let’s review what the greatest analytic minds covering Apple today have to say:

Piper Jaffray’s Gene Munster: Galaxy S4 Evolutionary, iPhone To Essentially Maintain High End Share In CY13. “The Galaxy S4 appears to be largely an incremental update to the S3 including a slightly larger screen (4% larger on diagonal), better camera and processor, and updated software, but largely the same body style and casing. We believe some of the software features are unique, including the tilt to scroll, video pausing based on facial recognition, and hand gesture based interactions, but view these software improvements as minor compared with what Siri was to the iPhone 4S or even Google Now to Android… Despite the launch and fanfare around the Galaxy S4, we continue to believe that Apple will maintain a low 40% market share in the high-end smartphone market in CY13.”

Despite Munster being wrong about so very many things, he is (correctly) conservative in his assessment of what the S 4 will mean to Apple’s sales. Basically, it’s status quo. And those “software features” are nothing but items on a list of things users won’t engage, as evidenced by The Verge’s hands-on with the device.

Jefferies’ Peter Misek: Software Features Took the Stage. “The hardware was as expected and much like iPhone 5, the S4 saw little change in design from its predecessor besides a slight increase in size from 4.8″ to 5”. Samsung focused primarily on its software innovation and interface inputs such as gesture control and Smart Scroll/Pause. While we were impressed overall with our hands-on experience, we await to see how these features perform in the real world and if they are actually used. What does this mean for Apple? We believe the S4 will certainly sell well and it is incrementally negative for Apple; however, the device is not revolutionary, in our view. Aside from the large screen size, which we believe gives Samsung a large advantage over Apple, we believe many of the features can easily be replicated. Additionally, a major complaint amongst Galaxy users is that they do not like Samsung’s customized software, especially when it is a downgrade in performance from stock Android features.”

“Software innovation” that Misek has to “see how these features perform in the real world and if they are actually used”. Apparently Misek was more impressed than the people who write about technology for a living, or maybe his feigned praise is meant to be offset by his “wait and see” rhetoric, which is analyst codespeak for everything. And I’m sure Apple’s hard at work on “many of the features [that] can easily be replicated”. If they’re easy to replicate, Apple doesn’t replicate them. Read a book about Apple or something. Further counter to his point about Samsung’s “software innovation” is the statement that “a major complaint amongst Galaxy users is that they do not like Samsung’s customized software”. So which is it? This is typical analyst stroke-and-slap doubletalk. Anyone basing an investment decision on this non-analysis deserves to lose all their money. You have been warned.

Nomura’s Stuart Jeffrey: Galaxy S4 to help Samsung overtake Apple. “While clearly a step forward relative to the S3, there is much that is evolutionary about the S4, rather than revolutionary. Nevertheless, we see the S4 potentially helping Samsung to overtake Apple in high-end smartphone shipments during 2013. Our initial thoughts include: • Derivative form factor – the S4 looks rather similar to the S3 and sustains. • Samsung use of plastics as the main backing material. • Some compelling new features, although some will only work with other S4s or new Samsung TVs, arguably limiting their appeal. • 35-40m high-end S4 and Note sales per quarter seems feasible, which would see Samsung overtake Apple in terms of high-end volumes.”

Evolutionary. Remember the sting when critics leveled that term against Apple’s 4S? That’s pretty much the word reviewers are using, only Apple’s evolution tends to result in actually useful features, not the ADD-riddled uselessness being offered as features in the S 4. Bonus burn for use of the word “derivative”, which I think we can all agree summarizes Samsung’s entire smartphone existence. Yet the 35-40m number will overtake Apple? OK. Guess it’s good that the standard insulation of “seems feasible” was added to this “analysis”.

Barclays’ Ben Reitzes: More Competition for iPhone Comes As Expected. “In terms of competition vs. Apple, the GS4 seems largely as expected – and there could be some relief for Apple (certain versions of LTE won’t be available until later this year). However, as we stated recently in a recent report – we believe that Samsung’s momentum is a major issue for Apple. As a result, we need to see Apple expand its iPhone market this year in a big way – and improve its platform. However, Apple seems rather silent of late – and could be waiting until C3Q to make any competitive response outside of potential adjustments to pricing.”

“Largely as expected”, but it represents Samsung’s “momentum”. Read the first part of the topic sentence again: “In terms of competition, vs. Apple, the GS4 seems largely as expected”. I don’t know what that even means. And how do you know an analyst has no clue about Apple’s product cycle and should therefore pursue a career doing something else? “However, Apple seems rather silent of late.” That’s because they’ve been silent every year around this time since forever. The incomparable Daniel Eran Dilger, writing for AppleInsider, tells us how the competition has exploited this “quiet period” in the past. This level of ignorance comes from analysts who should be using their “insights” to fuel trash can fires under a bridge to warm their recently-unemployed asses.

Credit Suisse’s Kulbinder Garcha: Galaxy S4: An impressive device. “We believe the S4 device will continue to drive growth for Samsung in the high-end of the smartphone market from ~115mn devices in 2012 to ~180mn devices in 2013 with build plans as high as 200mn units. Combining this with Apple’s growth, we continue to highlight that the high-end of the smartphone market should grow to unprecedented levels, and will likely grow 34% yoy to nearly 400mn units in 2013… The addition of Galaxy S4 to Samsung’s high-end portfolio certainly presents risks to Apple in the near term owing to increasing competition and product transition. Long term, we still believe iPhone remains a growth business (our iPhone estimates are 158mn/194mn in CY13/CY14, implying global share of 16%) driven by continued growth in the high-end of smartphone market, incremental opportunity from carrier expansion (we estimate 65mn) and ecosystem advantage.”

A 57% increase YoY? That’s pretty ambitious. The rest of it is exceptionally non-committal, which is how analysts like it.

Stifel’s Aaron Rakers: Samsung Ups the Smartphone Ante. “We believe that the display, the camera, the software and several unique features ups the ante in the smartphone market… Comparing the iPhone 5 and Galaxy S4 specs:

  • The iPhone 5 has a screen resolution of 1136 X 640 pixels and 326 ppi. The S4 has a screen resolution of 1920 X 1080 pixels and 441 ppi.
  • The screen size of the iPhone 5 is 4 inches compared to 5 inches for the S4.
  • The iPhone uses a 1.3 GHz dual-core processor compared to a 1.9 GHz quad-core or 1.6 GHz octa-core processor for the S4.
  • The iPhone only has a 8 MP camera versus 13 MP for the S4.
  • Finally, the iPhone 5 weighs 3.95 ounces versus 4.59 ounces for the S4.”

Samsung ups the ante by upping the specs on their phone. Let’s engage in the totally-discredited practice of comparing specs between Samsung and Apple devices. “The iPhone only has a 8 MP camera versus 13 MP for the S4”. 13 is more than 8! Samsung’s upping the ante! When intelligent analysis fails, I guess you can always default to product specs. Because everyone knows the experience of using a smartphone boils down to who has the most (unused) processor cores in their devices, right?


 Posted by at 1:58 pm

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