Apple's stock price soars despite Bixby's notable AR platform

On April 6, KT Economic Research Institute Digieco announced in a trend briefing, “Can the Galaxy S8 and S8+ beat the iPhone?”

The Galaxy Note 7 battery incident took away the top spot.

Samsung Electronics released the Galaxy Note 7 in August 2016, but a battery issue led to a full recall just two months later. The Galaxy Note 7, which was supposed to counter Apple's new device launches and play a crucial role in boosting device sales in the second half of 2016 and early 2017, ended in failure. Samsung Electronics lost the top spot in the global smartphone market to Apple in the fourth quarter of 2016.

Digieco wrote, “In the smartphone market, Apple takes most of the operating profits, so the number one position in the market may not have much meaning, but it has symbolic significance. If the Galaxy Note 7 had not failed, Apple would have been able to widen the gap not only with Apple but also with Chinese companies targeting China and Southeast Asia.”

The Indian market is moving towards a similar situation to the Chinese market in 2014.

The current Indian smartphone market is moving in a similar direction to the situation in China in 2014, with Chinese companies pushing out Indian low-cost handset manufacturers. Of the top five smartphone vendors in India in the fourth quarter of 2016, four (excluding Samsung Electronics) were Chinese companies (Lenovo, Micromax, Reliance Jio, and Xiaomi), with Xiaomi experiencing particularly strong sales growth. Apple is also expanding its production facilities and offline channels to expand its presence in the Indian market. Samsung Electronics could face a similar situation in China in 2014, facing pressure from Apple in the high-end market and Chinese competitors in the mid- to low-end market.



Samsung Electronics held the top market share in China until the first quarter of 2014. However, with Xiaomi's sales increasing significantly and Apple's expansion in China, Samsung Electronics has now been pushed out of the Chinese market. Of course, the Indian market is only about one-fifth the size of the Chinese smartphone market, and Apple's price competitiveness is relatively weak due to the lack of a large middle class with purchasing power. Samsung Electronics is expected to maintain its current market position by defending low-priced Chinese smartphones. If Samsung loses the Indian market to Apple and Chinese companies, following its success in China, it could struggle to expand its smartphone sales in the future.

The Galaxy S8 and S8+ will likely be more than capable of holding onto their market leadership.

The Galaxy S8 and S8+ are important devices that must be able to restore product reliability that was damaged by the Galaxy Note 7 battery explosion and demonstrate Samsung's continued presence as the market leader. Currently, the domestic and international market response is positive, and the three biggest advantages are believed to be design, the intelligent personal assistant Bixby, and the Gear VR and Samsung DeX that support expandability.

Digieco stated, "It's noteworthy that Bixby's image recognition technology has added shopping features," but added, "The lack of an AR platform is a limitation ," and viewed this as the biggest reason Apple's stock price rose after the S8's launch. Samsung Electronics, which relies on Google and Facebook for platform support, expected to build its own AR platform only after Apple's AR platform launch.



Differentiation from the iPhone is key

The report predicted that the Galaxy S8 and S8+ will continue the success of the Galaxy S line due to their high design perfection and improvements to the intelligent personal assistant.
Furthermore, regarding the iPhone 8's design, he predicted, "It will maintain the basic design of the iPhone 6 and 7, but with an expanded screen, a front and back made of glass, and all the bezels on the front and back will have a certain degree of curve." To further bolster its assessment of the phone as a major smartphone innovation, he mentioned the inclusion of a 3D-capable camera and an augmented reality platform.

The smartphone market's performance is determined within weeks of a device's release. In that sense, the iPhone 8's impact on the Galaxy S8 and S8+ sales is unlikely to be significant. Finally, the report stated , “After the Galaxy S8 and S8+ have achieved a certain level of success in sales, the iPhone 8 is expected to be unveiled, leading to a full-scale competition for the throne.”