Apple analyst Gene Munster

Apple Inc. (NASDAQ:AAPL) iPhone 5 now faces competition from Galaxy S4. Thursday evening, Samsung unveiled the Galaxy S4, its flagship device and Apple Inc. (NASDAQ:AAPL) iPhone’s most relevant competitor.

However, ‘Apple Guru’ Gene Munster is not frightened by the Galaxy S4. The analyst at Piper Jaffray is out with a new report on the Galaxy S4. Gene Munster believes that ‘while there was hype around the event approaching that of an iPhone launch, the device launched was very similar to an Apple “S” model update. Furtheremore, Munster states, ‘while the S4 is likely to be the iPhone’s biggest competitor this year at the high-end of the market’, he remains confident in his iPhone estimate for this year of 177.5 million, which includes a cheaper phone in the September quarter.

Munster views the S4 as unlikely to meaningfully impact iPhone share of the high-end over the full year, but does expect it to take share from other Android phones. Munster believes that investors will return to AAPL ahead of the cheaper iPhone, which he views as likely the most important product release for Apple in CY13. We summarize Munster’s thinking below:

Galaxy S4 An Incremental Update Akin To iPhone S Models

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. Some of the software features are unique, including the tilt to scroll, video pausing based on facial recognition, and hand gesture based interactions, but these software improvements are minor compared with what Siri was to the iPhone 4S or even Google Now to Android.

Expect Apple Inc. (NASDAQ:AAPL) To Maintain Low 40% Share Of High End Market

Despite the launch and fanfare around the Galaxy S4, Apple Inc. (NASDAQ:AAPL) will likely maintain a low 40% market share in the high-end smartphone market in CY13. The Android, and Galaxy specifically, has closed the gap with the iPhone in terms of software and in some cases hardware.

Apple Inc. (NASDAQ:AAPL) will likely launch an iPhone 5S, which will include improved specs and some new unique software features, but will not be a redesign. Munster believes that even without a redesign, the iPhone 5S potentially in June will enable Apple to re-accelerate unit sales from March.

Samsung Jumping Into Wearable Technology Ahead Of Apple Inc. (NASDAQ:AAPL)

One minor announcement Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) made during the S4 launch is the S Band, which is a Nike FuelBand type device. Munster believes that this is a quick first pass for Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) on wearable technology ahead of Apple Inc. (NASDAQ:AAPL)’s watch. He stills expects Apple to launch a connected watch by 2014.