By Julia Love and Deborah M. Todd
Samsung Electronics Co Ltd’s abandonment of the Galaxy Note 7 after reports of the phones catching fire will likely touch off a turf war among Android smartphone manufacturers, analysts said, presenting them a rare opportunity to gain share but with less room for archrival Apple Inc.Consumers tend to commit to their choice between Apple's iOS operating system for smartphones and Google’s Android, leaving Samsung’s fellow Android manufacturers such as LG Electronics and Alphabet Inc's Google in prime position to strike. Both have newly released phones.A hardware problem is unlikely to change a customer's preference for software systems, said analyst Jan Dawson of Jackdaw Research. “Samsung has the premium end of the smartphone market pretty much sewn up on the Android side,” he said. “This creates a slightly bigger opening.”Nevertheless, in San Francisco, prime Apple territory, some consumers were switching to the home team, and Apple stock has risen on expectations of a broader move."Some people might have already been thinking about making the switch and now here's their chance," said Robin Williams, a sales associate at Sprint store on Van Ness St in San Francisco, describing some customers moving to Apple.
Bob O’Donnell of TECHnalysis Research said Apple would benefit, "but I don’t think they are going to get all of it because Apple has a single product."Samsung announced the recall of 2.5 million Note 7s in early September following numerous reports of the phones catching fire. On Tuesday, the South Korean tech giant that has long dominated the premium market pulled the plug on the $882 device in what could be one of the costliest product safety failures in tech history.The news is a boon for Google, which last week announced a new line of Pixel smartphones, plunging the company into the hardware market that it has previously left to manufacturers such as Samsung. Samsung’s retreat will prompt consumers to take a closer look at Google’s phones.
And despite the reputational damage, Samsung will remain competitive for premium smartphone sales, analysts said. LG’s V20 smartphone will not arrive in the United States until the end of the month. Google’s Pixel phones do not ship until Oct. 20, and will only be available in the United States at Verizon."The Pixel has limited distribution," Tuong Nguyen, a research analyst at Gartner who saw Android companies aside from Google gaining the most from Samsung's woes.For consumers seeking immediate replacements for the Galaxy Note 7, it may be easiest to go with another Samsung phone, said O’Donnell. “You can’t write off Samsung,” he said.
And Apple may have room to shine, especially before new Android phones arrive.At a T-Mobile store in San Francisco, salesperson Omar Arreola said some Samsung customers were so upset with the company that they switched to the iPhone 7. "They trust the brand," he said. Brian Green, whose Note 7 caught fire on a Southwest Airlines flight last week, also said he replaced his device with an iPhone. He raced to purchase the Note 7 after its release, but he said he is unlikely to be an early adopter again. “Next time I think I'll wait and get it once it's been around the block a few times,” he said. (Additional reporting by Rory Carroll and Malathi Nayak; Editing by Peter Henderson and Lisa Shumaker)
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Updated Date: Oct 12, 2016 02:33 AM