Samsung's U.S. Galaxy S III launch: Victim of its own success?

Samsung's U.S. Galaxy S III launch: Victim of its own success?

Summary: Samsung's success in the U.S. is both a blessing and a curse. It dominates the U.S. smartphone market, even outshining Apple's iPhone. But delays, sales injunctions, and supply chain issues are hampering Samsung's latest efforts to crank out its Galaxy S III smartphone to the market.

TOPICS: Samsung

The world's largest smartphone maker, Samsung, has the highest U.S. smartphone market share, and has all but single-handedly propelled Android's success over iOS.

But Samsung is starting to feel the pressure, born out of its own success.

The Korean-based smartphone giant recorded profit of $4.46 billion in its first quarter alone, giving no indication that the company could find the weight and burden of its booming smartphone sales overwhelming.

But delays to its latest Galaxy S III model could signal a tumultuous time for the company --- and its loyal customer base.

Samsung mobile business president J.K. Shin said this week the company expects to see 10 million sales of its next-generation Galaxy S III smartphone during July.

But it is unknown whether Samsung is playing it safe and giving a conservative estimate, or revised down the expected figure to take into account the troubles it faces at home and abroad.

What is clear, is following a successful launch in Europe, the vast bulk of that figure will likely not come from U.S. customers.

Aside from the forthcoming smartphone, Apple was granted a preliminary injunction this week barring U.S. sales of Samsung's Galaxy Tab 10.1 earlier this week. Apple must set down a bond of $2.6 million to secure its tablet-making rival against damages should the injunction be overturned.

Apple did not say whether it would, or indeed when it might post the bond. Update: Apple has posted the bond, banning the Samsung Galaxy Tab 10.1 from sales in the United States. See here.

This poses at least one headache for the company away from its Galaxy S III launch. But Apple's suit on its flagship tablet product is now firmly on the back-burner as the last thing Samsung is worrying about.

All the major carriers are struggling to either stock the phone or keep up with the demand for the next-generation Android-powered smartphone.

Sprint pushed back the Galaxy S III's release date by more than a week, while T-Mobile said it has a limited supply. Verizon has still yet to make the long-awaited smartphone available. AT&T said "manufacturer supply constraints" were delaying pre-ordered smartphone shipping out to customers, according to MarketWatch.

Samsung said its problems were due to the outselling of the Galaxy S III smartphones, rather than a shortage of specific components: "Our supply hasn't been able to meet the soaring demand, but the situation will improve soon," a spokesperson said.

But if major U.S. stores aren't selling the devices yet, or facing "manufacturer supply constraints," Samsung's excuse doesn't seem to fly.

The U.S. is one of Samsung's strongest markets, despite its poor market share figures in the tablet market. If the Galaxy S III can't make it to the U.S., the company has to find revenue elsewhere.

The Wall Street Journal recommends China, particularly with its need for a smartphone maker to fill the low-end device space. As long as Samsung can keep the U.S. market happy --- Apple's own legal issues aside --- a sudden rush to an emerging market would not be necessary.

Apple's involvement in this is both a minor and a major one. For the time being, Apple can sit on its Samsung sales injunction quite content in the fact that Samsung is barely selling any of its phones. All the time, new customers are opting for iPhones, or other Android devices.

Financially, Samsung is faring the storm well, but its share price suffered following analysts' expectations that the slow rollout will affect its second-quarter results.

"Despite the tough economic situation in Europe and problems with supplying components for the Galaxy S III, the second-quarter earnings will be better than the first quarter," Shin said, according to the Press Association.

At market close on Monday, Samsung shares dropped more than 4 percent, wiping off around $6.4 billion off the company's market cap.

Image credit: CNET.


Topic: Samsung

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  • Galaxy s 3

    I don't know why people use android phones they are so full of bugs and freeze so often. They are not really cheaper in most cases then a iPhone or windows phone. I have found that windows phones can be full of bugs if you get away from samsung.
    • Cost is not the only factor ..

      Many people are not choosing an Android-based phone over an iPhone because it is cheaper, but because they don't want to exist in in Apple's arbitrary, paternalistic world.

      As for reliability, I've been using the original Motorola Droid for over two years with no problems. I've just ordered the Galaxy S3 and can't wait for delivery!
      • Just went Android -> iPhone 4S

        The phone works better, is easier to use, battery lasts longer, and interfaces with my stuff better than my Droid X ever did.

        Glad to be back and it can show what a good ecosystem can do - things just work.
        • DroidX wasnt even that good

          Not only was the DroidX a rushed to market competitor for the EVO but it had alot of things about it that were never officially fixed. Also if you knew how to use your phone the battery would have lasted longer because the iPhone has a sh1t battery life, and you cannot replace or upgrade the battery.
      • Got mine.

        I received it on my doorstep on opening day. It's a true marvel and I had the 4S to compare it against for a few days before I sent it back. It's not just Apples self imposed dictatorship on their devices but that my phone has massive functionality that the 4S didn't.
      • same here

        Not only are iPhone's super overpriced, but I dont know really anyone who hasnt had to have theirs replaced atleast 1 time during their contract (with some people getting them replaced as many as 4 times) each time losing everything. I could never deal with some crap like that, and for some reason Apple gets away with having what is literally one of the worst phones to ever exist. My EVO has been going strong for 2 years + now
    • PERHAPS...

      ... You should know that People prefer Freedom vs Dictatorship (example: Firefox Browser allowed for Android but Forbidden in iOS)
      • Blame that on Mozilla:

        There are alternative browsers for iOS. Opera comes to mind as one.
        • except

          that every browser on iOS is inferior to Safari because Apple keeps it that way. Not allowing any 3rd party engines to be used for external browsers, and not allowing any browser other than safari to access the Safari javascript engine (or to have their own) forcing them to rely on an old and slow WebUI based implementation.
      • and today

        Google announces Chrome browser for iOS as well.
      • Shells

        Those browsers are just shells for Safari-Webkit. None has their own JS engines.
    • People do not know alternatives

      People do not know about Windows Phones so they choose android. This is how I understand it :)
      • I had a Windows phone

        Windows phone platform fell behind, Windows Mobile was behind and then the Windows phone 7 (and soon 8) are far behind both iOS and Android.
    • Re Androi: "They are not really cheaper in most cases then a iPhone ...",

      I bought a Samsung Galaxy Proclaim (ver. 2.3.6) not S3, a month ago, because it was smaller, but full featured AND on Straight Talk/VERIZON network. $45.00 a month UNLIMITED TALK, TEXT and DATA.
      I have spent hours and hours on it ( 8 hours a day CONSTANTLY using data ) and I haven't heard a peep about it, except today, they "hit me up" for a whole $45.00 for NEXT month :-)
      All that time I have been getting up to speed on the apps that work best using the least memory possible for my needs and with ALL those apps now I can hit those small keys in portrait mode. At first I was just %*(%%^&& going nuts.
      I have Sam. You have Siri. Sam works really well (SpeaktoIt Assistant) opens apps to take a note, make a call, do a search etc. Only SanDisk backup app and a couple others did I pay for.
      I may have spent, maybe, $20.00 on apps (one time charges, not recurring).

      The phone cost me $179.00 and the day before I found a Walmart that actually HAD one. I had called them the day before and they had just got a shipment of 34 in. About 24 hours later I was there to buy one. Good thing I didn't need TWO! The Walmart guy said there where 14 when he came on shift at 4pm. I came in around 10:30pm.
      Only ONE was left out of 34 in 24 hours!

      The S3 isn't the only Samsung Android selling and I can see why.
  • Logic?

    Wow, this article needs some scrutiny from the viewpoint of logic. The ban is on the older Galaxy Tab ... the Galaxy Tab 2 isn't banned, and the ban has nothing at all to do with the SGIII. And supply problems could well be because of how WELL the SGIII is doing in other markets (that's what's hinted at by the Samsung rep - and not addressed in this article). Samsung's in trouble if it has a temporary pipeline inventory issue in the US on the SGIII? Huh?
    • except

      That the Galaxy Nexus just got banned in the US too.
  • Brain Dead Viewpoint

    Apple will be the one with the problems, it is the Asians that provide everything that Apple puts in its products and biting the hand that feeds them will eventual be one more nail in the coffin of the over hyped marketing firm in Cupertino.
    The good things to say about Apple are diminishing, even with authors like these who find any chance they can to hype the company.
    Researching and Developing technologies, engineering products and manufacturing those products all thing Apple doesn't do.
    Apples main strength, over hyping others technology as theirs.

    The iPhone falls from its perch 1st with the rest of the i products following suit.
    • Brain Dead Reply

      "Apple will be the one with the problems, it is the Asians that provide everything that Apple puts in its products and biting the hand that feeds them will eventual be one more nail in the coffin of the over hyped marketing firm in Cupertino."

      And EVERY major Asian manufacturer would kill to get the next iPhone contract. One of Apple's biggest suppliers, Samsung (hahaha) just bent over backwards to defend their display contract.
      In short, you don't know crap about what you are talking about.

      "Researching and Developing technologies, engineering products and manufacturing those products all thing Apple doesn't do."

      As hominem is all but avoidable here, but suffice it to say that your opinion is based more on your COMPLETE lack of knowledge than any reasoned thought.
      1) Apple has one of the highers R&D budgets in the industry.
      2) Apple employs more engineers than just about any American electronics firm.
      3) Please name a single computer or device company that manufactures their products.

      Hint, the iPhone has not fallen from its perch. There is not a single carrier on the PLANET, who sells both iPhone and Android, where the iPhone does not outsell EVERY Android device COMBINED.
      • Are you serious!!!the PLANET

        "There is not a single carrier on the PLANET, who sells both iPhone and Android, where the iPhone does not outsell EVERY Android device COMBINED."
        Seriously, u make that bold statement, on the PLANET!!! I am from South Africa, Blackberry is the top seller here, followed by Android and lastly iOS. As soon as Blackberry carriers stop the free data they give to their users, then that should change.
        I myself have had a iPhone 3GS, and after that went to Galaxy S1, and after that the Galaxy S2. And what about the Indian market, i highly doubt the iPhone even makes a dent in that economy.
      • Carriers

        ... except for pretty much EVERY carrier in Sweden.

        Also, no matter how high their R&D is, I have yet to see a single piece of original technology from them. Everything so far has been existing things, polished.