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Samsung muscle versus Apple's 'cool'
by Staff Writers
Seoul (AFP) Nov 4, 2012

Apple sells 3 million iPads in new launch
San Francisco (AFP) Nov 5, 2012 - Apple said Monday it sold three million iPads in the first three days of its launch of the iPad mini and fourth-generation model of its original format iPad.

The tech giant said demand for iPad mini "exceeded the initial supply," meaning some orders will be delayed until later this month.

Apple did not break down precise sales of the mini -- the 7.9-inch (20 centimeter) tablet which joins several other small-format tablets -- and the new iPad, which has a 10-inch (25 centimeter) screen.

"Customers around the world love the new iPad mini and fourth-generation iPad," said Tim Cook, Apple's chief executive, in a statement.

"We set a new launch weekend record and practically sold out of iPad minis. We're working hard to build more quickly to meet the incredible demand."

Both iPad mini and the new fourth generation iPad were launched Friday in 34 countries, in Wi-Fi only versions. Apple will be selling the tablets with mobile connectivity in a few weeks.

The iPad mini weighs 0.68 pounds, 53 percent lighter than Apple's third generation iPad. It is 7.2 millimeters (0.28 inches) thick, 23 percent thinner than the original iPad and thinner than a pencil.

The iPad mini with Wi-Fi connectivity and 16 gigabytes of memory costs $329, the 32GB model sells for $429 and the 64GB version for $529. It is more expensive than rivals from Google, Amazon and other makers.

Apple's senior vice president for marketing Phil Schiller helped unveil the iPad mini, insisting that it was an entirely new design and not "just a shrunken down iPad".

Like later versions of the original iPad, the new Apple tablet features rear- and front-facing cameras, and also has stereo speakers.

Apple shares, which have been under pressure in recent weeks, rose 1.5 percent to $585.78 in late morning trade and analysts reacted favorable to the sales report.

"We believe the release is a positive surprise," said Ben Reitzes at Barclays.

"Given today's announcement, we believe our estimate for (current quarter) iPad mini sales of 6.5 million units could be conservative, especially in the event Apple improves supply."

Peter Misek at Jefferies said the sales were "stronger than our expectations" of two million units.

"We expect sales will continue to be strong in the fourth quarter with the addition of the LTE (mobile) models, launches in new countries (including China), and holiday demand," he said in a note to clients.

Its products may not, as one British judge put it, be as "cool" as bitter rival Apple's, but Samsung Electronics is speeding away from the iconic iPhone maker in the race for the global smartphone market.

The South Korean giant first took Apple's smartphone top spot in the third quarter of 2011, racking up a 20 percent slice of worldwide sales, compared to Apple's 14.5 percent, according to telecom research firm IDC.

Jump ahead a year to the just-finished third quarter of 2012 and Samsung's share has surged to 31.3 percent, with Apple on 15 percent.

Popular perceptions of the two companies -- currently locked in a series of patent infringement lawsuits in 10 countries -- could hardly be more different.

Apple is seen as the supreme innovator, single-handedly creating or re-inventing entire markets with a small number of imaginative, stylish products that inspire quasi-religious devotion among those who can afford them.

Samsung, by contrast, is the corporate behemoth that picks up ideas, refines them with extraordinary efficiency and packages them in a wide product range that covers both low- and high-end users.

The hysteria that surrounds most Apple launches is testament to the expectations it generates as a product and design pioneer, a role Samsung has never particularly aspired to.

Ironically, Apple's design muscle saw it lose one of its patent fights with Samsung when a British judge ruled in July that Samsung's Galaxy tablet was not "cool" enough to be confused with Apple's iPad.

However, Apple has been forced to adapt in the face of Samsung's rise. On Friday it released the iPad mini -- a scaled-down version of its beloved tablet computer -- but it failed to generate the same excitement as previous launches.

Apple's late co-founder Steve Jobs had once derided the whole concept of small tablets, saying they should be packaged with sandpaper, "so that the user can sand down their fingers to around one quarter of the present size".

In a reversal, the iPad mini saw Apple following Samsung into a segment the South Korean firm had already entered earlier this year with the 7-inch version of its Galaxy Tab 2.

But in general, Apple has been the pioneer and Samsung has played catch-up. Nevertheless, Samsung has shown itself to be unbeatable when it comes to gathering its vast resources behind a full-frontal assault on new markets.

"The copycat label still sticks to Samsung whether it likes it or not, but there's still a great business in that," said senior IDC research analyst Kevin Restivo.

"Being a fast follower can be a path to number one, and Samsung is a case study for that," Restivo told AFP.

Most analysts point to two key factors behind Samsung's success in the hugely competitive smartphone market -- its embrace of Google's Android operating system and its low- to high-end marketing strategy.

By adopting the popular Android platform and concentrating solely on hardware, Samsung was able to leapfrog smartphone makers such as Nokia and Blackberry-maker RIM who stuck with their own operating systems.

"Once it commandeered the Android battleship and got it pointed in the right direction, it made real dents in the opposition," Restivo said.

Its marketing strategy, meanwhile, has been to put up a high-end flagship model -- the Samsung Galaxy S series -- to challenge the iPhone while pumping out other more affordable models, especially in markets like Brazil and China.

"The Galaxy S series is really just the tip of the iceberg for Samsung, which makes a huge number of lesser-known, lower-priced smartphones," said Greg Roh, an analyst at HMC Investment Security.

"Globally, there are not a whole lot of consumers who can actually afford iPhones, so Samsung is catering to a far wider range of consumers than Apple and has the market share to prove it," Roh said.

Samsung deploys a shotgun strategy, scattering the market with new phones being released -- or older ones being refreshed -- every six to nine months to continually push up its unit volume.

Apple, meanwhile, has stuck to rolling out one high-end smartphone device a year with a far higher profit margin than Samsung's product range.

Although the South Korean firm has gobbled up market share, Apple still leads its rival in terms of overall profitability in the smartphone sector.

Looking forward, James Song, a technology analyst at Daewoo Securities, believes it is the California-based company that will have to change course.

"I think Apple will soon be forced to roll out mid- or low-priced gadgets in order to survive," Song said.

"The current market landscape is that Apple has a market share of, say, 20 percent with a (profit) margin of 40 percent, whereas Samsung has a market share of 40 percent with a margin of 20 percent.

"Which one will survive in the end? Definitely the latter," he said, noting that Apple component suppliers were already demanding higher prices that would impact profit margins.

Underscoring its commitment to variety, Samsung announced Friday that global sales of its scaled-up smartphone, the Galaxy Note II, had topped three million since its debut in late September.

The main issue for Samsung, according to both Song and Restivo, is how it handles its future relations with Google, given its dependency on the Android platform.

Google's recent acquisition of smartphone maker Motorola Mobility was seen by many as the start of a trend that would see power in the smartphone market shift from hardware to software companies.

"Samsung's strength is still largely confined to hardware, and it really needs to develop its software capability given Apple and Google's control in that area," Song said.


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Apple iPad mini makes low key debut
Tokyo (AFP) Nov 2, 2012
The iPad mini got off to a low-key start Friday, with little of the hype-fuelled razzmatazz of earlier Apple launches, as analysts said the costly creation may have come too late to the 7-inch market. Around 300 people queued up outside Apple's flagship store in Tokyo, some wearing fancy dress, to get their hands on a device the company insists is more than just a shrunken version of its pop ... read more

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