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Apple puts the big hurt on Samsung

Matt Hamblen | Feb. 2, 2015
2015 will be a challenging year for the Korean phone maker, but there are steps Samsung can take to reverse its declining market share.

Both companies are expected to put major marketing dollars behind their smartwatches because of the devices' connections to a wide variety of fitness and other applications, as well as to more expensive smartphones. They will be seen as the must-have fashion and gadget item for many tech-savvy buyers, and will offer either company a chance to create a greater brand connection.

On that score, Apple would seem to be the clear winner because an Apple Watch could delight its loyal Apple base eager for new technology. Some analysts have predicted as many as 30 million Apple Watches will be sold in the first year, about 75% of all smartwatch sales for the same period. About 10 million smartwatches sold in 2014, Gartner said, with Samsung taking the largest share.

Apple's big splash with its Apple Watch will undoubtedly legitimize the entire smartwatch category. Apple has said it will have 34 different models, starting at $349, which matches the initial price of the Gear S.

While Samsung might be envious of the enthusiasm for the Apple Watch, Apple's entry may help Samsung -- for a time.

"Samsung's smartwatches are going to benefit from the Apple marketing machine," Burden said. "Apple has a way of legitimizing markets in the eyes of consumers, and Apple will push a rising tide that lifts all ships."

Samsung might see Apple as its biggest smartwatch competitor, but the Apple Watch marketing storm will probably push traditional watch makers, such as Tag Heuer and Swatch, to enter the market. "They'll see that the smartwatch market is not likely to go away and these vendors will want to have a stake," Burden said.

"The competition Samsung faces will only become more fierce, but Samsung should benefit from Apple's Watch launch in the short run," Burden added.

That could be small comfort, given all the disappointing news Samsung has faced on the smartphone front in recent months.

 

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