Several new phones coming, but all eyes on Samsung

By Anick Jesdanun

Associated Press

Published: Monday, Feb. 24 2014 1:59 p.m. MST

Samsung CEO J.K. Shin presents the new device Samsung Gear Fit at the Mobile World Congress, the world's largest mobile phone trade show in Barcelona, Spain, Monday, Feb. 24, 2014. Highlights of the show included major product launches from Samsung and other phone makers, along with a keynote address by Facebook founder and chief executive Mark Zuckerberg.

Manu Fernandez, Associated Press

BARCELONA, Spain — Sony unveiled a new waterproof phone that can take ultra-high-definition video. Nokia introduced three Android smartphones aimed at emerging markets. And Lenovo announced one with an all-glass exterior.

Yet the spotlight Monday was on Samsung, which announced a successor to its flagship Galaxy S4 smartphone. The Galaxy S5 will feature a heart-rate monitor, a fingerprint sensor for security and a sharper camera with faster auto focus.

Samsung's glitzy announcement during the Mobile World Congress wireless show in Barcelona, Spain, made it harder for other phone makers to get noticed. Samsung had several times the attendance of either Sony's or Nokia's event Monday. An orchestra opened Samsung's event as blue spotlights moved up and down the aisles.

"It's increasingly difficult to get attention for your mobile device in a very crowded marketplace," said Dan Hays, U.S. wireless advisory leader at the consulting firm PwC.

It's even more difficult when one of the competing devices comes from Samsung Electronics Co., which announced the new phone a day after it unveiled two new computerized wristwatches, the Gear 2 and Gear 2 Neo. Samsung also announced a fitness band on Monday. Apple is the only company that might be able to overshadow Samsung, but it isn't attending or announcing anything at the show.

Roger Entner, an analyst with the Recon Analytics research firm in Boston, said the S4 and its predecessor, the Galaxy S III, were both blockbuster phones and have helped Samsung surpass iPhone maker Apple Inc. as the world's largest smartphone maker. According to Gartner, Samsung had a 31 percent market share last year, compared with 16 percent for Apple. No other company had more than 5 percent.

More important than having well-made phones, however, "is that they are spending a significant amount on advertising," Entner said.

Samsung spent nearly 4.6 trillion won ($4.3 billion) in advertising in the 12 months through September, about four times the $1.1 billion Apple spent in the same period, the latest for which figures were available. Although Samsung also makes TVs, refrigerators and other products, analysts believe much of the marketing is for newer products such as phones.

In a November interview with The Associated Press, Motorola Mobility CEO Dennis Woodside said Samsung has shown "that marketing can really create a product and create a phenomenon. We're never going to have the money that they have to market our products."

The only other company that comes close to matching Samsung's muscle is Apple. The iPhone's debut in 2007 showed the world that phones can do much more than calls and messages. Since then, each new iPhone release has taken on an aura of a rock concert, with the most devoted Apple fans lining up at stores for hours or days to buy one.

Apple typically skips trade shows, however, and prefers holding its own events.

In fact, Samsung also typically holds its own events. Last year's Galaxy S4 announcement came in New York a few weeks after the Barcelona show. But timing this year's unveiling to the show is a good opportunity for Samsung to make deals with wireless carriers and other partners.

Sony Mobile President Kunimasa Suzuki said that with Apple and Samsung so dominant, the real battle is for No. 3. He said that means marketing that is focused by country and product line.

"It doesn't mean we just directly compete with the big giants," he said in an interview Monday.

Despite all the marketing power, Samsung will have to give people a reason to upgrade. There's a notion that phone improvements these days are incremental rather than innovative.

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