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Galaxy Note 4 won't turn around Samsung's ailing fortunes, analysts say

Mikael Ricknäs | Aug. 7, 2014
The company needs better high-end smartphones and a better portfolio of low-end devices.

Samsung Electronics is expected to launch soon the Galaxy Note 4, in a bid to help improve its ailing fortunes in the high-end segment of the smartphone market. But the company's problems run deeper with local vendors eating its lunch with cheaper devices in countries like China and India.

On Wednesday, Samsung posted an invite to the "Unpacked 2014 Episode 2" event, which will take place simultaneously in Berlin, Beijing and New York on Sept. 3. The company usually launches a new version of its Galaxy Note line at the IFA trade show in Berlin, and this year seems to be no different with the invite telling people to "note the date."

The launch comes after a second quarter that was catastrophic for Samsung. The company may still be the largest smartphone vendor in the world, but its market share dropped from 32.6 percent to 25.2 percent. And while overall sales grew by almost 27 percent, Samsung's shipments dropped by 1.5 million units to 74.5 million smartphones, according to Strategy Analytics.

The Note family has become very important to Samsung, but something more is needed to give the company a real boost.

"I think Samsung is in a holding pattern at the moment. Any new device launch at this stage is really focused on stabilizing rather than regrowing its device business. For Samsung to revitalize its sales the company needs a revolutionary design, something like a foldable or bendable screen to shake up the market," said Neil Mawston, executive director at Strategy Analytics.

The Galaxy Note 4 is likely to be more of an evolution of the existing Note 3 model. Rumored specifications include a 5.7-inch screen with a 2560 by 1440 pixel resolution and Qualcomm's new Snapdragon 805 processor.

Even if the Galaxy Note 4 is an incremental update under the hood, Samsung has to show it has learned from the "Galaxy S5 debacle," according to Neil Shah, research director at Counterpoint Technology Market Research.

The Galaxy S5 has been seen by many as a disappointment, largely because it doesn't have a more luxurious design like the HTC One M8 to help set it apart from previous models and cheaper smartphones.

"I hope the Note 4 will have all those factors missing from the S5. For example, a premium design with a new design language that includes some metal instead of the plastic design of its existing products. If you look at the Note 2 and 3, and the Galaxy S4 and S5 from the front they all look the same," said Shah.

With Apple expected to launch new iPhones with bigger screens just a couple of days after the Unpacked event, Samsung must have something special in store to avoid further market share losses.

 

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