Samsung Introduces New Galaxy Phone

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Samsung Electronics is the world leader in smartphone sales, besting Apple in many countries. Now Samsung of South Korea is stepping up its challenge to Apple, bringing the battle to its rival's home turf.

At a packed event at Radio City Music Hall in New York on Thursday, Samsung showed off the Galaxy S 4, which has a screen slightly larger than the latest iPhone.

The device has quirky software features, including Smart Scroll, in which the front camera detects when someone is looking at the phone, and scrolls the screen according to the angle the phone is tilted. The phone can also be controlled with hand gestures. Waving a hand down in front of the phone will scroll up on a Web page, for example.

"Once you spend time with the Galaxy S 4, I'm very confident you'll find how its innovations make your life simple and fuller," said JK Shin, president of Samsung Mobile Communications, at the company's first promotional event for its flagship smartphone.

With the prominent introduction of the phone, Samsung is trying to end its role as understudy to its more celebrated competitor, especially in the crucial American market, where Apple still rules. Even as Samsung has surpassed Apple in global market share, it is often criticized in the United States as an effective copycat, taking most of its product cues from Apple. But Samsung has begun flexing its marketing muscle more aggressively here to try to change that perception.

"This is Samsung's time right now," said Gene Munster, an analyst at Piper Jaffray. "They are clearly gaining more attention this time around than they ever have."

Apple itself is showing signs of concern. In an unusual move on the eve of the Samsung event, Philip W. Schiller, Apple's senior vice president for worldwide marketing, gave several interviews in which he discussed flaws in mobile devices based on Android, the Google operating system used by most of Samsung's smartphones.

But Apple still has many big advantages that allow it to defend its position in the mobile business. Its iPhone 5 was the best-selling smartphone in the world in the holiday quarter, even though Samsung's vast portfolio of phones is bigger than Apple's. By charging a premium for its products, Apple raked in 69 percent of the profits in the smartphone business last year, compared with 34 percent for Samsung, according to a report by T. Michael Walkley, an analyst with Canaccord Genuity. (The numbers add up to more than 100 percent because Apple and Samsung combined made more money than other competitors lost.)

While analysts like Mr. Munster expect Samsung to gain market share in the United States in the coming two quarters, they predict Apple is likely to still dominate the crucial holiday shopping season, when gift shoppers buy mobile devices in droves. That is when sales of the iPhone typically outperform all other devices. By unveiling its flagship phone just before spring, Samsung is striking at Apple months before a new iPhone is expected to be released.

"Everyone stays out of the zone of iPhone launch periods," said Horace Dediu, a blogger and analyst with Asymco.

Apple's iPhones fly off the shelves in the United States, but Samsung is still the top seller of smartphones worldwide. And in the United States, Samsung is gaining.

In the fourth quarter of 2012, sales of Samsung devices accounted for 30 percent of the American smartphone market, up from 21 percent the previous year, according to NPD Group, the research firm. For the same time period, Apple's iPhone accounted for 39 percent of the market, down from 41 percent the previous year.

Samsung is far exceeding Apple in its rate of growth worldwide. In the holiday quarter last year, Samsung shipped 63.7 million smartphones, up 76 percent from the previous year, according to IDC, the research firm. Apple sold 47.8 million, up 29.2 percent from the previous year.

Samsung has won the global volume race by releasing multiple models of smartphones at different prices and sizes, while Apple has released one new model every year. Along with the Galaxy S III, the Note II, a Samsung phone with an even bigger screen, has been a popular seller.

"Samsung's momentum has been tremendous if you look at where they were three years ago to where it is today in the smartphone market," said Chris Jones, an analyst at Canalys.

Apple of Cupertino, Calif., is famous for products that create markets, as was the case with the iPhone and iPad. Apple has accused Samsung of stealing many of its best ideas in the mobile market. Last year, it convinced a jury that Samsung had infringed Apple patents, winning a $1 billion award that a federal judge in the case recently reduced to $600 million, a figure that could change as the case develops. Some recent moves by Apple have appeared to be in response at least in part to competition from Samsung. It released a smaller iPad and a bigger iPhone after Samsung had been selling smaller tablets and smartphones with bigger screens for a while.

"Right now Apple is the challenger, and basically the power dynamics have changed already," said Tero Kuittinen, an analyst at Alekstra, which helps companies reduce their phone bills. "Suddenly, Apple looks a little defensive."

Before Thursday's introduction, Samsung's new smartphone generated nearly as much discussion and excitement in technology blogs as a new iPhone. "This is like the hype around the iPhone was two years ago," Mr. Kuittinen said. "A year ago nobody cared about Samsung Galaxy S III. It's not like the tech blogs wrote five posts a day about it."

The Galaxy S 4 has several notable features. One, Dual Camera, allows the user to take a photograph with the front and rear-facing cameras simultaneously. At a basketball game, for example, a user can shoot a photograph of the game with the rear camera and the user's reaction to it with the front camera; the two shots appear in one photograph.

Before Thursday's event, a Samsung employee said the Smart Scroll feature would rely on tracking eye movements to determine where to scroll. When asked about the lack of eye-controlled scrolling in the new phone, David Park, a manager of Samsung's mobile division, said the company had experimented with several approaches and decided to use the tilting method.

Samsung also added Group Play, which will allow multiple Galaxy phones to link together to play a game together. It uses Wi-Fi to bridge a connection.The phone will be available next quarter on Verizon Wireless, AT&T, T-Mobile USA and Sprint. The older model, the Galaxy S III, was extremely popular because of its large screen and software capabilities; for a while it even outsold the iPhone. The company did not reveal a price for the Galaxy S 4, but said it should be the same as other premium Samsung phones, which have cost $200 with a contract.

To defend its lead in the market, Samsung will have to introduce capabilities in devices and set trends, said Chetan Sharma, a mobile communications consultant. But Mr. Kuittinen of Alekstra said Samsung has been setting the trends for a while. This year, Apple should introduce an iPhone with an even bigger screen, he said.

"They knew that if you do a phone with a huge 5-inch display, it will have big demand because it turns out people really want to have a phone with an enormous screen," he said. "Apple didn't know that."

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This article originally appeared in The New York Times.


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