The unveiling of the long-awaited Galaxy S4 by Samsung has upped the ante in the already highly-competitive smartphone space - which has long been called a two-horse race at the top, between Samsung and Apple.
Following Apple marketing chief Phil Schiller's uncharacteristic "trash talking" on the eve of the Galaxy S4 launch, Apple has taken it another step further and released a new ad campaign punting the iPhone with the tagline: "There's iPhone. And then there's everything else."
The "Why iPhone" Web site, created by Apple, also delves into all the features that are said to make the iPhone the superior handset. It has been noted this is the first time since the debut of the first iPhone, six years ago, that Apple has gone on the defensive.
Samsung, along with other Android competitors such as HTC have upped their game, offering handsets with specs that go well beyond what the current iPhone 5 (which was released in September last year, and is only rumoured to be receiving its next update in August this year) has to offer on paper.
For example, the S4 has a screen resolution of 1 920 x 1 080 pixels and 441ppi, while the iPhone 5 has a screen resolution of 1 136 x 640 pixels and 326ppi. The S4's screen is a full inch larger than the iPhone 5, and features a 13MP camera (compared to the 8MP camera of the iPhone 5). Again, while the iPhone 5 has a 1.3GHz dual-core processor, the S4 boasts a 1.9GHz quad-core or 1.6GHz octa-core processor.
Tech commentator John Gruber has analysed the rhetoric around Samsung, the S4 and the claims that Apple has "ceded the crown" and he notes: "For some, the fact that Apple and the iPhone now face at least one serious (and successful) competitor somehow means that the iPhone is already losing. This is insane.
"By market share alone, one can argue that Samsung is winning, but... the iPhone has never been close to a market share leader. By market share alone, the iPhone is far behind even Nokia."
Gruber adds that by profit share, however, in 2012 Apple took 69% of the handset industry's profits, while Samsung took 34%.
"For just the last quarter, the numbers were 72% for Apple, 29% for Samsung. You will note that both the annual and quarterly numbers total more than 100%; that is because all other handset makers, combined, are losing money. This is rather astounding - Apple and Samsung have together destroyed the rest of the mobile handset industry."
Gimmicks and game-changers
Chief telecom analyst at Ovum, Jan Dawson, says while the Galaxy S4 is a worthy successor to the S3 and will sell well, it also highlights some of the key challenges Samsung faces.
"Firstly, having innovated rapidly over the last several years to vaunt itself into top spot in the world smartphone rankings, Samsung now faces essentially the same challenge as Apple: how to continue to improve its devices year on year when existing phones are already top of their class, and there aren't obvious shortcomings?"
Dawson adds another challenge for Samsung is how to set its devices apart from others running Android. "As rivals such as HTC and Sony up the specs of their devices and provide ever better hardware, it becomes more and more important for Samsung to differentiate on software and services."
According to Dawson, while the improvements to eye-tracking and the addition of the hover feature and S Translator are steps in the right direction, "they can be seen as gimmicks rather than game-changers".
"At this point, Samsung appears to be trying to kill the competition with sheer volume of new features - there should be something here for everyone, even if most of these new features won't be used by most users."
While Dawson says Samsung will remain ahead for the time being due to its superior marketing budget and relatively weak efforts from competitors in the software space, it will need to "continue to stretch" as competitors start to catch up.
"It also needs to build a stronger set of content offerings that cross its various platforms, so that it can extend its leadership in smartphones into the tablet space, and give consumers a reason to buy into an 'all-Samsung' experience with their consumer electronics," says Dawson.
Piper Jaffray analyst Gene Munster also called the S4 "evolutionary" and an incremental update to the S3. Munster says the S4's software improvements and features are "minor" compared with what Siri was to the iPhone 4S or Google Now to Android.
"Despite the launch and fanfare around the Galaxy S4, we continue to believe that Apple will maintain a low 40% market share in the high-end smartphone market in CY13," says Munster.
Verbal warfare
Referring to Apple's new "defensive" stance and Schiller's comments made prior to the S4 launch, general partner for Allegis Capital, Jean-Louis Gass'ee, notes that while Samsung often resorts to "trash talk" in its own ad campaigns (which are seen as fun rather than defensive) Apple is held to a different standard:
"Once a challenger with an uncertain future, Apple has become The Man. Years ago, it could productively poke fun at Microsoft in the great I'm a Mac, you're a PC campaign, but the days of taking potshots at the incumbent are over. Because of its position at the top, Apple should have the grace to not trash its competitors, especially when the digs are humourless and further weakened by error."
Gass'ee adds that he has an enduring frustration with the way Apple executives abuse words such as "incredible", "great", "best" when they're discussing the company's products and business.
While he says there's nothing wrong with optimism and positivity, in this case it is "about hyperbole and the abuse of language".
"When words become empty, the listener loses faith in the speaker. Apple has lost control of the narrative; the company has let others define its story. This is a war of words and Apple is proving to be inept at verbal warfare," says Gass'ee.
Ceding the crown
Gruber, however, argues that the narrative is being manipulated: "The desire for the 'Oh, how the mighty Apple has fallen' narrative is so strong that the narrative is simply being stated as fact, evidence to the contrary be damned.
"It's reported as true simply because they want it to be true. They're declaring 'The king is dead; long live the king', not because the king has actually died or abdicated the throne, but because they're bored with the king and want to write a new coronation story."
Gruber acknowledges that Samsung has done extremely well over the last few years, but he adds: "By any measurable means other than market share what they've achieved is the number two spot, behind Apple. You can reasonably make the argument that they're on their way to unseating Apple; that the momentum lead belongs to Samsung. (I would disagree, but cede that it's possible.) But no facts today suggest that it has already happened."
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