Galaxy S5 will see curtains go up on Monday at the Unpacked event in Barcelona. But this time Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) is under a lot more pressure to deliver something revolutionary. Apple Inc. (NASDAQ:AAPL) is winning over the high-end users, while Chinese vendors like Xiaomi and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) are strengthening their respective positions in low-end emerging markets.
Lenovo recently acquired Motorola for $2.9 billion to expand its presence outside its home turf. According to research firm Canalys, Xiaomi has gained 7% market share in China to become the third largest smartphone vendor in China in terms of shipment value. It aims to sell 40 million smartphones this year.
Big challenges before Galaxy S5
Another big challenge before the Galaxy S5 is that market expectations have been rising with each new iteration. Its predecessor Galaxy S4 was tagged a failure because its hardware didn’t see radical improvements from the Galaxy S3. The two devices looked almost identical, and the only major difference was seen in software and apps. With the Galaxy S5, Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) has to prove that it still has the technical expertise to charm consumers and entice them to upgrade. Will the upcoming flagship device from the Korean company be a step ahead of the iPhone 5S? Rumors and speculations have increased consumer expectations, leaving little room for Samsung to surprise them.
Of course, Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) will try to introduce some innovative features. But it can’t put every innovation imaginable into the Galaxy S5. The key is whether it will add features that will get customers to upgrade their smartphones or prompt iPhone users to switch. The growth in the smartphone market is slowing, and Samsung is feeling the heat. Last month, the Korean giant reported its first decline in quarterly earnings in more than two years.
Consumers expect hardware improvements with Galaxy S5
Kantar Worldpanel analyst Carolina Milanesi says that the lukewarm response to Galaxy S4 has proven that software improvements aren’t enough to tempt buyers. So, the company has to put more emphasis on hardware and design this time. Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) has always been known for its hardware advancements. But it’s become pretty hard to differentiate the devices based on hardware alone. Apple Inc. (NASDAQ:AAPL) struck a chord with the gold color and fingerprint sensor in the iPhone 5S. Let’s see what hardware tweaks Samsung makes to grab shoppers’ attention.
Sources close to the Korean company recently confirmed that the Galaxy S5 will have a fingerprint sensor. It shows that Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930) is still trying to catch up with the iPhone 5S. Yet another report suggested that the device will be waterproof. That’s a good feature which may entice a lot of users. But then Sony Corporation (ADR) (NYSE:SNE) (TYO:6758) has already been offering the waterproof and dustproof Xperia Z.
Galaxy S5 has to be a blockbuster
It doesn’t mean the Galaxy S5 doesn’t have anything unique in store. The latest Unpacked event teaser image hinted at some exciting new features. The teaser indicates that the Galaxy S5 will have a faster Snapdragon 800 or Exynos 5 processor, an improved battery life, and new apps. The teaser also suggested that the Galaxy S5 will come with a health & fitness tracking tool, and an upgraded Knox software for security. The device is likely to have a Personal Folder and a Private Mode to better manage privacy.
If Samsung Electronics Co., Ltd.(ADR) (LON:BC94) (KRX:005930)’s new smartphone is as advanced as reports have suggested, it will create more trouble for other Android vendors like Sony Corporation (ADR) (NYSE:SNE) (TYO:6758), LG Electronics Inc. (KRX:066570) (KRX:066575) and HTC. But what if the Galaxy S5 disappoints? That could be disastrous for Samsung because the Galaxy S4 has already failed to meet user expectations. Two back to back disappointments will raise questions whether Samsung is still the king of the hill. The Galaxy S5 has to be nothing less than a blockbuster!