Samsung Galaxy S4 rumors can now be put to rest. Samsung finally unveiled its Galaxy S4 at the “Samsung Unpacked Event” in New York on March 14th. Its overall design looks similar to that of the Galaxy S3 (curve-shape and location of button on the front) but it is slimmer and lighter compared to its predecessor, despite a slightly bigger screen. In this new report by JPMorgan, analysts analyze the potential impact to SEC and the relevant supply chain.
New features and functions: Galaxy S4 carries a 5” FHD OLED screen at 441 ppi and weights 130g with 7.9 mm thickness. Its cameras have 13MP on the back with 2MP for front, and both AP and mDRAM are upgraded while NAND density remains unchanged. Galaxy S4 includes several new features such as Air Gesture, Smart Pause, and Smart Scroll but analysts believe Samsung should do a large marketing push to explain those features to consumers.
Samsung’s Shorten launch time: As the smartphone product cycle is getting shorter, Samsung has introduced S4 in 10 months since the previous model, S3 was announced in May, 2012. Also, they will begin to ship S4 from the end of April which is shorter than for the S3 (two months+ since introduction). They plan to sell S4 through 327 operators in 155 countries and support all global LTE networks including TD-LTE and FD-LTE.
Initial reaction likely to be negative but the next catalyst should be sell-through: Given that there is lack of innovation in design and specifications are broadly in-line with market expectation, S4 sell-through should be the next catalyst for the share price, in JPMorgan analysts’ view. Of note, 6.5 million Galaxy S3 units were sold in its first month followed by 40 million in the next six months; the market expects S4 shipments to be more than double vis-à-vis S3 during same period.
Implications to supply chains: As analysts continuously highlighted, Samsung’s vertical integration is strengthening and they expect both SEMCO and SDI momentum to improve into 2Q13E along with earnings increase. Both new camera module and battery should bring further ASP increase. While incremental change may look no greater than before (upgrade from S2 to S3), the slimmer design contributes to a price hike as well as margin improvement, in analysts view. While Samsung affiliates remain as key suppliers for these two major parts, Patron is one of the key contributors supplying various sensors that differentiate S4 features from those of the S3.
Samsung Galaxy S4’s Price and Launch:
Samsung announced it is to launch the Galaxy S4 by the end of April on an international basis to 327 carriers in 155 countries. Although the company hasn’t specified on pricing, JPMorgan believe that release price will be similar to Galaxy S3. The company will initially launch the phone in two colors; black/white and other colors later.
Specifications – Display, Memory, Camera, and Battery
Galaxy S3 has 5.0” full HD super AM-OLED display with excellent color reproduction (~441pi) and is equipped with 16/32/64GB NAND flash memory and 2GB RAM. New Galaxy brings 13 megapixel cameras as primary and 2 megapixel for front as well as sensor lens next to it. Its battery is ~25% larger than Galaxy S3. Lastly, new device weighs 130g and is as slim as 7.9mm.
User Interface
Galaxy S4 focused on enhanced user interface functions such as “Samsung Smart Pause”, “Samsung Smart Scroll”, “Air view”, “Air Gesture”, “S-Voice drive”, “Stranslator”, “Samsung Watch-On”, “Samsung Optical reader”, “S-Health”, “Samsung Knox”, “Dual-video Call”, and various other functions.
Samsung’s share price reacted negatively despite the new Galaxy S3 launch news back in early May-2012. The share underwent downward movement for two and half months and began to move up on positive sell-through shipment news. Analysts project the near-term share price reaction from Galaxy S4 launch may be negative, given the lack of innovation in design and specification broadly in-line with market expectation. However, positive sell-through shipment news should be the next catalyst to drive the share price, in analysts’ view.
