SEOUL - 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-cum-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.
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Samsung kicked off global sales of the Galaxy S III on May 29, but immediately signalled 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 customisation. Samsung has obviously developed huge leverage in negotiations with carriers and created a 'must have' handset."
Based on the article stated as above, we could see that Samsung itself has stirred quite a commotion in the demands over smartphones nowadays. It is due to the facts that through their latest launched product which is known as Samsung Galaxy SIII, they had driven their consumer’s frenzy. Moreover, this is supported by the facts that Samsung Galaxy SIII has been recognized by people worldwide not just as a cheaper subsidiary towards its rival; rather Samsung Galaxy SIII itself has become the best smartphone preferences known till now.
The Samsung Galaxy SIII itself was also really well known for its features which is said that it could compete or stand against the thread from Apple most well-known product, the iPhone 4s series which is why people tend to see or being curious about Samsung’s new product. In spite of that, Samsung’s company itself was having a slight problem of shortage on manufacturing it which affects some European sales and United States had to suffered delay over delivery on some pre-ordered phones. Shortage occurred due to the unexpected huge increase in the demand for Samsung Galaxy SIII. Therefore, the supply of Samsung Galaxy SIII is less than the demand. In addition, Samsung Galaxy SIII was originally designed in 2 colours which are white and blue, but due to the lack of satisfactory from the society for the blue design causes Samsung’s company to delay the launched over the products and disposed away almost half of a million blue cases, which causes low quantity of Samsung Galaxy SIII in the market. Moreover, Samsung Galaxy SIII achievements were also causes by the well planned time of launching when Apple’s iPhone 5 series haven’t been estimated to launch until the late of this year of 2012 which causes people to still refer to Samsung as it is much more new and still overpower the latest iPhone 4s series. Moreover, other products such as Google's Motorola and Nokia have not created much of a market stir which makes Samsung as still the only choice compared towards the iPhone. Furthermore, Samsung itself might have overestimated the competition rather than believing over its own product which causes them to catch off guard by the demand number. Despite of that, they still manage to be the best selling smartphone products to the facts that there are only 3 major of the most well-known product during this period which is HTC One X, iPhone 4s, and Samsung Galaxy SIII itself which boost their chances to go through the other two products in terms of selling number.
In order to overcome their shortage problem, Samsung needs to increase their quantity over the supplies in the Samsung’s market. Due to that, Barclay’s had lowered its forecast over 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 as stated as the article above.
In the future, it is estimated that the number of sales over this product would still increases due to 3 facts which is, Samsung was currently the biggest competitor against Apple, Samsung unexpectedly stood up against the Apple’s iPhone with its sudden rapid improvement over their product with their Android OS which managed to hold against Apple’s I OS, and because of the disappearance of the original creator and innovator of Apple’s iPhone “Steve Jobs” due to unexpected death.
Firstly, Samsung has exceeded people’s expectation due to its sudden improvement with their Android OS and their new product Samsung Galaxy SIII which is as good as or far better than Apple’s iPhone 4s currently. Some people stated that there’s a pretty good chance that Samsung Galaxy SIII could still be evenly match with the new coming product of Apple’s iPhone series, the iPhone 5. Moreover, that statement was supported by the unexpected sudden increase in the demands for Samsung Galaxy SIII which is not normal because Samsung’s previous product couldn’t even reach this kind of level and it wasn’t truly well known until just recently.
Secondly, the fact that Steve Jobs existence does give an impact towards the market sales in supply and demands was stated as the graph below.
Based on the graphs above, we could see that Steve Jobs has the power to move or even to change Apple towards a better direction. It is due to the facts that Steve Jobs successfully change the graph of sales from before his appearance and after he came in. Moreover, Steve Jobs truly have the power to move or even control people’s heart due to his charismatic charm or even his passion towards creating a brand new hand phone based on his own ideal. He himself was already known worldwide due to his crazy innovation and imagination that someone could have and he did achieve it by creating the most notorious brand of hand phone that we know and used till now, the iPhone. Furthermore, his achievement has already proven him to be the same level as how Bill Gates did with his Microsoft and Windows product by creating the Apple’s Mac with Lion OS X as its operating system, This conclude that Steve Jobs was truly a master because of his skills in technology which excel almost in every products in IT’s and hand phones.
After exceeding almost in every sales for its hand phones and IT products, Apple themselves didn’t realize that Steve Jobs was having a chronic disease of cancer which causes them having a slight decrease over the sale market because he was taking a break for few months. Moreover, they didn’t prepare well enough or Steve Jobs himself wasn’t able to find the next successor due to his high individualism. Thus when he passed away, Apple lost their big boss and the next successor was not really trusted enough by the Apple’s user which causes most of them to migrate or change over towards another phone because their original trust lies on Steven Jobs hand.
In conclusion, people tend to choose or move towards Samsung product was caused by all of the three statements that were listed as above and I do personally believe that Samsung Galaxy SIII is far better than iPhone itself because they only win their brand name only but not by qualities, which Samsung suddenly came up with.
Aaron
Aaron
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