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The Samsung Galactic Empire

The Samsung Galactic Empire

Samsung has previewed its next top-shelf Android offering, the Galaxy S III. The company is strongly challenging Apple's position in unit sales, and the S III could prove to be a summer hit that puts Samsung over the top -- if it isn't there already. Meanwhile, RIM sweated through BlackBerry World, things warmed up between Microsoft and Barnes & Noble, and Target burned Amazon's Kindle line.

By Paul Hartsock TechNewsWorld ECT News Network
05/05/12 5:00 AM PT

This past week has been especially kind to Samsung. Big sales numbers were followed by the unveiling of the Galaxy S III, the company's latest flagship phone and one that could very well own the market this summer.

The S III runs Android Ice Cream Sandwich, the latest version of Google's operating system and one that up to this point hasn't taken residence on a very large number of phones. As opposed to Apple's monolithic update strategy, Android updates come along when phonemakers say they will. So far, not too many phones have signed up for a bump up to ICS.

Barring updates, the way a new OS version makes it out into the wild is by shipping as the out-of-the box OS on new phones. If the S III is as big a hit as it's expected to be, it could usher in a big surge for ICS.

Samsung's new phone also ushers in some new features, like Smart Stay. That uses eye tracking through the front camera to figure out what you're doing with the phone and act accordingly. If you're reading an e-book, for example, it'll adjust the brightness. Then there's the Siri-esque S Voice. Tell it what you want, it gets it for you -- maybe. Sassy replies may or may not be part of the package.

With S Beam, two device users can share data quickly without the help of a WiFi network. And AllShare Cast will put content from the phone onto a TV.

Availability is still a little foggy for now, at least for U.S. buyers. Dates, carriers and prices are still way up in the air. The initial sticker price could be north of $200 -- top-of-the-line phones aren't so shy about asking for $300 plus contract straight out of the gate at this point. Usually better prices can be found with a little online detective work, though.

As for timing, general expectations seem to point toward this summer. The sooner the better, of course, but the S III could be in for a long stay as an untouchable sales champ, depending on which course of action Apple decides to take with the next iPhone. Last year's 4S was released in the fall, months later than Apple's typical annual summer release schedule, which I think was tied up in some way with moon cycles and the Summer Solstice. If Apple decides to whip up iPhone 5 in time for it to go back to a summer release, it'll likely have to go head-to-head with Samsung's new superphone.

But that fall launch last year resulted in enormous holiday sales for Apple, so it may decide to take its time and settle into a regular October timeframe for a few more years. And if that happens, Samsung looks set to rack up some very big S III numbers.


Listen to the podcast (13:15 minutes).

RIM's Last Stand

It's been an anxious few days for BlackBerry devotees at Research In Motion's annual BlackBerry World conference. RIM is a company hanging by its fingernails. Its CEO, Thorsten Heins, was given the job just last January, when the company was already chin-deep in the muck, and now it's his job to think up a way to swim out of it. According to statements he made last March, nothing's off the table, not even the sale of the whole company.

That's just a worst-case scenario, though. Plan A, of course, is to release a better product, something that can stand toe-to-toe with the best handsets coming from Apple and top Android phonemakers. RIM's putting everything it has behind its next-generation platform, BlackBerry 10, and the flagship phone that will presumably debut along with it.

And the BlackBerry 10 OS did show its face, with RIM officials demoing a fully touch-based interface with virtual keyboard on what appeared to be a plain, prototype piece of hardware. Integrated communication threads and gesture-based controls drew a few comparisons to the RIM PlayBook's existing interface. The camera has a handy way of automatically capturing images before you hit the shutter button, just in case you miss what would have been the best shot. And the touch-based keyboard features a few new tricks in the way of functions like autocomplete.

Lots of BlackBerry fans swear by them, in large part due to the quality of their physical keyboards, so the idea that RIM would jump only to on-screen virtual keyboards no doubt caused some disquiet. Never fear, button mashers -- Heins promised the company isn't giving up physical QWERTY keys.

But BB10 is still a work in progress, and there was no real BlackBerry 10 handset to be seen. Developers were sent home with prototypes for tinkering on, as well as a promise that they'll earn at least 10 grand per app in the first year of availability. Make sure to read the fine print on that.

The situation RIM's facing has a deja vu aftertaste that brings to mind the time Palm debuted its webOS operating system in early 2009 -- Zach Epstein at Boy Genius Report digs deep into that one. Palm was also a has-been leader in the smartphone circuit that needed a complete overhaul of its mobile platform to compete with the new superstars. What it came up with was fresh, innovative, impressively demoed, and not nearly enough to keep the company afloat. Palm ended up selling to HP, which eventually dumped webOS at a nice open source farm where it could run free.

Circumstances are a little different in RIM's case. RIM's more entrenched than Palm was, and faith in BlackBerry still runs deep in many corners of the corporate world. But iOS and Android are also way more entrenched than they were in 2009. Meanwhile, Microsoft's making an aggressive play with Nokia, and that pair already has Windows Phone products on the market.

Finally, investors appear decidedly unimpressed with RIM's showing. During the course of BlackBerry World, shares steadily sank about 15 percent.

Samsung Strength

Was anyone all that surprised the day Androids began outselling iPhones? Did it come as any kind of shock? Here's this freely distributed platform, well-supported, well-funded, lots of apps, with the Internet's most dominant corporation at its back and some of the biggest names in handsets at its front. It was just matter of time before that platform became bigger than an OS backed by a single company and found on one line of handsets.

That's just the result of two different styles: One's meant to go forth, be fruitful and multiply; the other's meant to stay under one company's guard and control.

Even as iPhones were being out-populated by Androids, the fact remained that Apple -- the company -- was the dominant smartphone seller. The Android pie gets split between HTC, Motorola, and everyone else making those kinds of phones. But Apple gets all of the iPhone pie.

That dominance is teetering on the brink, though, and it seems Apple may have actually been taken down a peg by its most hated nemesis: Samsung. They're fighting in sales, they're fighting in court, they're even fighting in their ads. Even though Samsung wasn't the culprit behind that dumb "Wake Up" flash mob in Australia, it was the initial prime suspect, if only because it fit the narrative of the struggle between these two.

And now it seems Samsung is on top for the moment -- depending on whose numbers you believe. IDC and Strategy Analytics have Samsung winning by a nose; IHS iSupply sees Apple still on top. It's all kind of hazy because Samsung's numbers don't differentiate between smartphones and feature phones.

Whatever the actual numbers are, it's clear both are selling a ridiculous amount. During the first three months of the year, more than 106 million people in the U.S. owned a smartphone. The market grew 42.5 percent year over year.

We'll learn a little more about how unit sales are trending for both companies in the coming quarters, along with the expected dips and spikes that come along before and after a major new handset release. But for now, while unit sales are still fuzzy, the money factor is very clear. Last quarter, Samsung took in $17 billion on all phones -- smart and feature -- while Apple's revenue was $29.3 billion on iPhone sales.

New Chapter

Microsoft is inching ever closer to the day when Windows will be a fully tablet-optimized OS. Yeah, you can get a Windows 7 tablet now, but that OS was not born and bred specifically for a slate-style device. It's sort of shoehorned in.

Windows 8 is different -- it's designed from the ground up for either tablets or traditional desktops and laptops, and it'll give Microsoft a unique foothold in the market: tablets that perhaps make people think "slimmed-down PC" rather than "enlarged smartphone."

But before that happens, it needs to get its platform together, and one recent step toward doing that involved burying the hatchet with a company that was until just days ago a sworn enemy: Barnes & Noble. Microsoft had targeted the bookseller's Nook e-reader in one of its Android-related patent stings. It's going after numerous companies that make Android devices, claiming they're selling products that use software that violates Microsoft patents. Usually a licensing deal is offered before anything goes to court, but Barnes & Noble proved to be a fighter.

In fact, it kept up the fight until Microsoft began offering it money rather than the other way around. The two companies have cut a deal, and it's not just a settlement over the Android scuffle. Microsoft has given Barnes & Noble $300 million in return for a 17.6 percent share of the Nook platform. The two are now partners, and a Nook app will be created for Windows 8. Nook will have a distribution channel planted right in the middle of Microsoft's upcoming OS, offering books, magazines, newspapers and other materials. Educational content will also be a main focus.

For Microsoft, this gives Windows 8 a signature e-book and e-reader platform. Apple has its iBookstore, Kindle Fire has Amazon's e-book library, now Windows 8 tablets will have a built-in reading room too. Maybe a dedicated e-reader platform wasn't as much of a must-have for the presumably bulkier and more PC-ish tablets that Windows devices are expected to be, but it can't hurt.

Meanwhile, Barnes & Noble gets out from under a lawsuit, takes in a nice load of cash, and gets to unload part of its Nook business -- a branch it had been thinking about spinning off earlier this year.

Burning the Kindle

Target is severing its ties with Amazon's Kindle e-reader and tablet line. Until recently, the retail mega-chain offered the Amazon-branded devices for sale in its stores, but there will be no more of that. Once its on-hand supply of Kindles is gone, it's washing its hands of the whole thing.

The news came rather abruptly, and Target declined to elaborate on exactly why it decided to ax Kindles. There was some suspicion that Apple was behind it. The iPhone-maker is experimenting with the idea of opening mini-stores inside Target locations, sort of like the mini-store kiosks it already has in Best Buy. With Best Buy on a decline, though, Apple's apparently looking for new ways to reach buyers who don't happen to live near a full-grown Apple Store, and Target is its latest love interest.

Apple trying to squeeze out Amazon by twisting Target's arm sounds like a hardball play, and it obviously isn't something it foisted on Best Buy -- those stores still sell Kindles left and right. But it's a different business, so maybe it's a different deal, and Apple is known for holding its partners' feet to the fire when it wants to.

But that's just one theory. Another idea: Target just decided it doesn't like the cut of Amazon's jib.

Amazon's relationship with physical retailers is growing more adversarial. For example, last December it told holiday shoppers to use its Price Check mobile app on products in stores to get a discount if they bought the product online instead.

The nature of Amazon's Kindle line is also changing. Back when the Kindle was just an e-reader, that was a different matter. Selling e-readers might undermine the sale of physical books, but who goes to Target for its wide variety of fine literature? E-readers don't undermine Target's business to any real degree; they're just another product to sell.

But that changed when the Kindle Fire came along. The Fire is designed to be an Amazon sales machine, and not just for e-books. The tablet makes it very easy to buy and download any sort of digital media that Amazon sells, and it's also handy for ordering physical products from Amazon's massive catalog. Fire owners get extra perks when they subscribe to Amazon Prime, and that service just so happens to include fast, free shipping for physical goods.

Wrap it all together, and it seems that every time Target sold someone a Kindle Fire, the store could expect to see that customer come around a lot less often.

Other brick-and-mortar retailers are still happy to sell Kindle Fire tablets, though, so it remains to be seen whether this was an aberration or the beginning of a mass retailer rejection of all things Amazonian.


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