High End Competition Is Intense
Apple, which is Samsung’s primary competitor in the high-end smartphone space, has been getting more aggressive in entering new markets. The company announced long-awaited deals to sell its iPhone to customers of China Mobile, the world’s largest mobile phone carrier, and NTT DoCoMO, Japan’s largest carrier by number of subscribers. The deals serve to vastly increase the company’s addressable market. Additionally, Apple is rumored to be launching a large-screen iPhone sometime this year. Large-screen sizes have been a key driver of smartphone sales of late and Samsung has been one of the biggest beneficiaries of the “phablet” trend. Its high-margin Galaxy S and Note phones, which have remained among the dominant large-screen devices, could face a threat from a potential large-screen iPhone, as customers in the phablet market could veer toward the software differentiation and user experience that Apple devices offer.