Galaxy S 6 and its Edge variation will take more share from other Android competitors rather than Apple. With the large screen iPhone, Apple has successfully retained its user base and also recaptured most of the previous iOS users who had defected to Android in pursuit of a larger screen experience.
Consumer behavior has changed over the last 2 years. They are more cautious and prudent in their spending and making plans ahead of big purchases rather than spontaneous impulse-based behavior. The iPhone 6 and 6 Plus had absorbed most of the budgets of the premium users and the cycle is not going to be broken for the next 24 months for these users. So the expected churn from iPhone users will not be large as consumers are working out of a more limited ‘digital budget’.
We’ve illustrated how the share in the $400+ premium market has changed and how it will probably change this year.
[Comparison of Galaxy S 4, 5 and 6 sales in the initial 9 months after launch]
The Galaxy S6 Edge will offer Samsung the ‘edge’ it needs to win back share in the premium segment and it will provide protection from the ‘Me too’ brands in Android for at least 6 months. It will also set a trend in the industry of metal unibody design and flexible OLED displays this year. Without a curved display it will be hard to gain any share in the premium market of the Android universe and without metal casing it will be difficult to gain share in the mid-tier market of Android in 2015.
We also believe that the market is ripe for consolidation. The local brands are proliferating and it is almost a jungle out there. Smaller brands are very vulnerable and there is very little profit being made. In most cases this is when consolidation strikes in. Amazon dominated the online market place at one point as did Qualcomm in the 3G baseband market. Usually it’s the No. 1 player that plays this role but we are not clear if Samsung is even interested in such a strategy.
The time for consolidation has come and if Samsung does not emerge as the consolidator someone else will. Huawei and Xiaomi are the most likely (after Samsung). LG and Lenovo also have a chance if they change their brand, product strategy this year.
written by Tom Kang
Above is a quick summary of our 6 page report on the Galaxy S6. To read the full report please click the link below (registration required for first time users). Or just drop an email to [email protected] and we'll send it out to you in no time!
[Projected market share change in the $400+ premium market]