The next Galaxy (Galaxy S4) is here, Samsung’s latest smartphone sports better hardware features and offers tighter integration with other home entertainment devices. While the phone might not offer significant incentives for iPhone users to switch over, but it clearly offers an attractive alternative at the high end of the market.
Let’s see Galaxy S4’s impact on Nokia And BlackBerry
In a recent report by Nomura equity research, analysts see little impact from the Galaxy S4 on Nokia Corporation (ADR) (NYSE:NOK) or Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB). The Lumia and BB10 range of devices are trying to build a competitive ecosystem to compete with Android. The Galaxy S4 continues to make it hard for both vendors, but not meaningfully more or less so than relative to the S3.
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Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s announcement this week that a partner (distributors or carrier) has ordered 1m Z10 devices is encouraging for near-term sell-in revenue trends. However, filling up the channel is no guarantee of sell-out success. Analysts’ experience of the Z10 suggests that, while promising, the platform is still no match for iOS or Android. They expect BB10 devices to primarily sell to consumers that prefer physical keyboard and to enterprises upgrading an ageing installed base – none of which analysts expect to be immediately impacted by the improved enterprise features of the Galaxy S4.
The Lumia 920 seems to have aged quickly. Even though the 920 only launched in November, the form factor no longer strikes as fresh given that this is Nokia Corporation (NYSE:NOK)’s 4th iteration of this form factor after the N9, Lumia 800 and Lumia 900. The Lumia 920 has a heavy form factor with a camera that hasn’t quite generated the positive reviews initially expected. Analysts believe that the Galaxy S4 and HTC One highlight the direction Nokia Corporation (NYSE:NOK) needs to go next if the company is to take share at the high end. In the meantime, analysts expect Nokia Corporation (NYSE:NOK) momentum to be driven primarily by mid-range devices, such as the Lumia 520, 620 and 720, none of which directly compete with the Galaxy S4.
Analysts from Nomura retain a ‘Neutral’ rating on both Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) and Nokia Corporation (NYSE:NOK) but see some potential downside for the stocks. They see a risk of both vendors seeing their low-end portfolios suffer from the emergence of low-priced Android phones from H2 2013 or early 2014. In the near-term, however, analysts expect both companies to show sequential growth in new smartphone sales, which we believe will sustain both stocks for the next quarter or two.