The street is all a twitter regarding Samsung Galaxy S4 sales estimate: 30% below expectations | BGR. We called this weeks ago with our coverage of the S4 launch. Turns out our analysis was spot on, that the S4 wasn’t having the same demand as the hype would suggest. This points out the fallacy of most forecasting methods based on sell-in rather than consumer demand metrics similar what we have developed at Argus Insights. Our analysis shows consumer dissent around a laggy performance and battery challenges with both life and charging. All the “features” added in the Galaxy S4 have clogged the experience for consumers and provide evidence that Samsung is still learning how to provide an integrated user experience rather a series of features chained together by marketing ads.
When the iPad Mini was launched in late 2012 it was into an already confused consumer market of the Apple faithful. The iPhone 5 had been launched weeks earlier to a largely yawn response from the market (though it’s improving now). The iPad 4 launched with the Mini, and out of the normal cycle consumers had come to expect from Apple, largely delivered what consumers expected from the iPad 3 in March of 2012. Along with the release of the iPhone, Apple released new iPod Touch, known commonly the gateway drug to full iPhone ownership, but at a reasonably high price point. This put Apple in a pricing squeeze play for the Mini, pricing it twice as much as it’s comparable competitors. As a result we saw slow adoption for the iPad Mini and even the iPad 4 around the holiday season.
Cut to today and we see demand spiking in a way we have not seen for an Apple product since the iPhone became available on Verizon. In wallowing through the social media analysis, we found the culprit. Apple allowed retailers to drop the price by a significant percentage in April, ahead of Mother’s Day and after probably having a disappointing Valentine’s Day. This is typically unheard of for Apple to allow a price drop before launching another product. The punchline? Apple is losing its ability to demand a premium from the market. A smaller iPad is cool but not enough to compete against the much cheaper but almost equivalent experience of the Kindle Fire. Apple will have to pull more than one rabbit from their hat at the event on 10 June. Argus Insights is preparing a special surprise to assess the market impact of Apple’s announcements. More soon!
We’ve checked our math over twenty times, gone back to the sources to verify what we’re seeing in the data from the market, but there’s no other conclusion we can draw, the Galaxy S4 is having what can only be termed a terrible launch. What? How can we say that? The S3 was the biggest threat to the iPhone 5 since the iPhone 4S! See it for yourself, the demand for S4 is much slower than the same time frame as its competitors.
Samsung has fallen into the same trap as Apple where the only thing consumers wanted more than a new iPhone 5 was a cheaper iPhone 4S. The same logic seems to playing itself out for the Galaxy S4, with a surge in response to both the S3 and iPhone 5.
We saw the market demand pause when the S4 was announced back in market (you can see the iPhone 5 bubble shrink a bit) but as soon as the S4 was available, iPhone 5 surged. Part of this is challenges in continuous innovating the user experience (eye tracking is like Siri, novel at first taste but annoying after), partly due to Apple getting aggressive with iPhone 5 promotions, rolling up their sleeves and wading into the brand wars everyone else is fighting. The smartphone market is insanely dynamic. Waiting for quarterly reports means you miss the chance to take advantage of these changes. That’s why Argus Insights tracks the market continuously. Look for our soon to be released weekly consumer demand report.
Like many of you, I have family and friends on the east coast currently buckled down for the storm of the decade. While thanking our lucky stars we don’t share the same timezone, my wife and I felt an minor 4.0 trembler that reminded us that no place is without risks. The same tremors were felt in the consumer electronics market last week with the dual launch of both the iPad Mini and the Microsoft Surface. One of the key measures of launch success is how long the meme persists in the user mindshare, something we happen to measure at Argus Insights. Below is the rough mindshare volume of the iPad Mini as compared to other products/brands mentioned within our iPad stream.
A falloff is to be expected, considering the buzz around the launch (see our earlier post here) but what’s interesting is the lack of any mentions of Microsoft Surface. Only the usual suspects from Samsung and Amazon can even penetrate the buzz around the Mini. When we examine a similar view of the Window 8 stream and look for evidence of Surface excitement we are faced with a different story.
Of course the new version of Windows is dominate but the day of the Surface launch event we seek the peak in user mentions of Surface. Just two days later the Surface is almost wiped clean by co-mentions of the iPad Mini? What gives? Aren’t there stories of people lined up to buy the Surface Tablet with it’s cool Touch Cover and complete Office Suite? When we dig into the actual mentions we find the culprit, Microsoft themselves. So anxious to ensure Apple didn’t steal any thunder from their events last week, Win 8’s fearless leader specifically compared the Surface to the iPad Mini, calling the Mini only “recreational” while the Surface is the more modern mullet, business by day, party by night. The update of this particular story almost blotted discussion of the Surface from the Twitter-sphere and provided Apple a voice where they previously had little.
Both products will find their sweet spot within the market. As soon as we have actual user data to share (not just expert reviews) we’ll let you know the results of the next face-off between these two high pressure systems and be able to forecast which product will produce the most rain for their maker.
RIM had their annual meeting earlier this week. Notably missing from the shareholder outcry was the push to sell or split off salable assets to interested parties. We all know that since the launch of the iPhone, RIM has been spiraling down in terms of both market share and customer satisfaction. The biggest question that the board and newish CEO should be asking if they can pull out of the dive in time before scattering push servers, patent plaques and unsold Storms all over the Canadian countryside. Of course we have an opinion on this. Actually we’ve just aggregated the user opinion on this. You can see the Blackberry fall from grace played out over this snapshot of the Smartphone market. Only LG has fallen faster from grace. These results are based on user opinions gathered from all RIM phones launched in the past few years.
Notice where Apple and Blackberry trade places in the minds of consumers. It was when the iPhone became available on Verizon so now the legions of RIM faithful in NYC and other major metro areas could finally embrace the iPhone experience and make phone calls, unlike their locked in AT&T brethren. Every attempt to refresh the product lines led to further decay while Apple continues to flourish.
But what is RIM to do? Is there enough residual Social Capital in RIM customer experience to recover with Blackberry 10, which has been delayed again? We’ll answer that question in our next post but you can always reach out if you’d like to know sooner!