1. GK3K's Avatar
    Thought I'd share...




    By Miyoung Kim
    SEOUL | Tue Jun 26, 2012 4:53am EDT


    SEOUL (Reuters) - Samsung Electronics' struggle to keep pace with rampant demand for its new Galaxy S III smartphone may have cost the South Korean firm some 2 million units of sales in just a month.

    For a company that has never stirred the sort of consumer frenzy that accompanies each new Apple Inc gadget, overwhelming demand is a nice problem to have. But some of the shortage stemmed from a manufacturing glitch that affected some European sales, while major carriers in the United States have had to delay delivery of some pre-ordered phones.

    The Galaxy S III has received the most positive reviews among any of the Samsung smartphones, and the technology giant says the phone is on track to become its fastest selling smartphone, with sales likely to top 10 million in the first two months since its launch.

    The latest Galaxy's launch has been well timed as the next iPhone is not expected until later this year, and offerings from others such as Google's Motorola and Nokia have not created much of a market stir.

    "Samsung might have been caught off guard by the demand, not because they did not believe in their own products, but because they might have over-estimated the competition," said Gartner analyst Carolina Milanesi. "In other words, aside from the iPhone and HTC's oneX there's not much out there at the moment, which would have certainly helped Samsung."

    Analysts reckon the Galaxy shortage will be a temporary hiccup, affecting some 2 million units of shipments in the April-June quarter. Samsung expects another record quarter of earnings from its handset business in the current period, helped by solid sales of its predecessor S II and phone-***-tablet Galaxy Note.

    Barclays lowered its forecast for Samsung's second-quarter Galaxy S III shipments to 6.5 million from 8 million, but raised its third-quarter shipment forecast by 1 million to 15 million.

    Samsung said component shortages have been resolved and it is running at full tilt to meet demand. "It is simply that demand far exceeded our expectation. But that doesn't mean we had set a very conservative demand forecast," Samsung said in an emailed statement to Reuters.

    APPLE CHALLENGER

    Samsung kicked off global sales of the Galaxy S III on May 29, but immediately signaled a delay of 2-3 three weeks for delivering the pebble-blue version of the model.

    Less than a fortnight before launch, Samsung's then CEO Choi Gee-sung, now head of parent Samsung Group's corporate strategy office, ordered that half a million of the blue cases be thrown away as the design, with thin, silver stripes, was unsatisfactory, according to daily newspaper Chosun Ilbo.

    After numerous design tweaks, Choi approved the final version on a Sunday less than 10 days before launch, the report said - as he was boarding a plane to fly to a court-ordered meeting in the United States with Apple CEO Tim Cook as part of a long-running patent dispute between the two smartphone powerhouses.

    Samsung said on Tuesday that delays caused by the blue case issue were a temporary blip and had been resolved, adding that a supply shortage in the United States was rapidly getting back to normal.

    In the United States, where sales were launched last week, major carriers including Sprint Nextel Corp and AT&T struggled to deliver pre-ordered smartphones. Sprint said on its website that both the 16 gigabyte and 32 GB models were out of stock, and an AT&T spokesperson said future orders would arrive within 10 business days based on available supplies.

    Samsung launched its first Galaxy two years ago in a bid to counter Apple's iPhone success. At the time, Samsung's global smartphone market share was below 10 percent. It has since overtaken Apple, and the company said in late April that the new Galaxy would "substantially contribute" to second-quarter results.

    Samsung sold 44.5 million smartphones in January-March, and current quarter sales are expected to top 50 million.

    "It's increasingly apparent the Galaxy S III is being considered a true peer to the iPhone, rather than simply the least-bad alternative," said CLSA analyst Matt Evans.

    "The change in status is most evident in the uniformity of the device among the five U.S. carriers. Unlike the Galaxy S II, there's little customization. Samsung has obviously developed huge leverage in negotiations with carriers and created a 'must have' handset."

    For Samsung, Galaxy halo effect comes with supply crunch | Reuters
    DAS, zak123321 and BostonBeats88 like this.
    06-26-2012 12:15 PM
  2. ReggieTee's Avatar
    It won't. Those that want one will still get one. The next competitor out, the next iphone, probably isn't out til September/October.
    Roboticz likes this.
    06-26-2012 12:25 PM
  3. Roboticz's Avatar
    I think the above poster is right. People who want this phone... really want this phone. If I can't find an SGS3 in store this week... it's not like I'm going to say "Screw this! I'm getting a HTC One X!"

    I want an SGS3 and only that. And for people who are more fickle... there isn't really a hotter phone out there now... so more likely they'll wait a bit.
    06-26-2012 12:38 PM
  4. DAS's Avatar

    Samsung sold 44.5 million smartphones in January-March, and current quarter sales are expected to top 50 million.
    This figure is absolutely mind blowing. When you consider that just 3 years ago Samsung had less than 10% market share.

    I also agree with the writer concerning the leverage that Samsung now enjoys with their devices. Every carrier wants the Galaxy series, and for the foreseeable future will be not be in a position to demand useless variants.

    I was impressed that not only was Samsung able to keep the devices basically the same, but also leveraged their market share to include the very packaging of the GS3. At&t always puts that ugly packaging on their phones, but every carrier was only allowed to put their logo on the back upper right corner of the box. \

    IMO, forcing the carriers to keep the device the same across the board also helped with sales and marketing (thus supply / demand problems). Samsung only needed to market the device as the Samsung Galaxy S3. This one move reduced confusion and created the recognition and permanent branding they enjoy.
    06-26-2012 12:42 PM
  5. calvin35's Avatar
    I think the above poster is right. People who want this phone... really want this phone. If I can't find an SGS3 in store this week... it's not like I'm going to say "Screw this! I'm getting a HTC One X!"

    I want an SGS3 and only that. And for people who are more fickle... there isn't really a hotter phone out there now... so more likely they'll wait a bit.
    I agree with you on this. I only want the SIII. I had the One X for a a while and to say that it was a tremendous let down would be an understatement. I can't wait to root the SIII and get a nice ROM.
    06-26-2012 12:48 PM
  6. MrSlippery519's Avatar
    I disagree, while the phone being delayed may cause a very small percentage of people to buy something else....really what else is available? The One X is really the only other option is someone is looking for the latest and greatest and if they wanted the One X they would have already bought it.

    It would be different if Apple had already announced the new iphone or something big was coming out in the next month but the fact is the SIII is going to be the top dog for a few months if not longer so those who want it will wait.
    Roboticz likes this.
    06-26-2012 02:58 PM
  7. firetruck41's Avatar
    I agree with some of the others in this thread, Samsung may have lost some sales, but most sales are probably just delayed, and will still occur when supply is there. Maybe more like: 2 million sales lost this quarter, an extra 1.5 million sales next quarter...

    Sent from my A500 using Android Central Forums
    06-26-2012 04:13 PM
  8. Crispy's Avatar
    I really hope Samsung continues this success story, they fully deserve it. And I hope they actually sue Apple and manage to get the iPhone 5 blocked worldwide, it would be sweet justice. And that the huge demand doesn't lead to bad quality control.
    06-26-2012 04:46 PM
  9. RyDawgBoston's Avatar
    That is crazy! Who said android would never catch up to ios? Samsung sure proved some people wrong.

    I went into AT&T today and they said they will not have any in store for atleast a month. Crazy!
    Good for Samsung...
    06-27-2012 01:31 AM
  10. CarFan's Avatar
    I'm coming over from Blackberry. I only want the S3. If I can't get it, I'm sticking with BB.
    06-27-2012 01:40 AM
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