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Samsung’s ditching of Galaxy Note 7 portends Android turf war

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.

Samsung Electronics’s abandonment of the Galaxy Note 7 due to safety concerns will likely touch off a turf war among Android smartphone makers, 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.”

Research firm TrendForce revised up Apple’s 2016 smartphone shipment forecasts by 3 million to 208 million, while slashing Samsung’s shipments estimates by 6 million. It also raised forecasts for China’s Huawei Technologies, No.3 globally, by 4 million.

“A substantial portion of consumers’ demand will now go to the three major Chinese brands – Huawei, Vivo and OPPO,” it said in a note.

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 a Sprint store on Van Ness St in San Francisco, describing some customers moving to Apple.

Samsung Electronics’s abandonment of the Galaxy Note 7 due to safety concerns will likely touch off a turf war among Android smartphone makers, analysts said, presenting them a rare opportunity to gain share but with less room for archrival Apple Inc.

samsung-galaxy-note-7

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.”

Research firm TrendForce revised up Apple’s 2016 smartphone shipment forecasts by 3 million to 208 million, while slashing Samsung’s shipments estimates by 6 million. It also raised forecasts for China’s Huawei Technologies, No.3 globally, by 4 million.

google-pixel-madebygoogle

Google’s Pixel smartphone

“A substantial portion of consumers’ demand will now go to the three major Chinese brands – Huawei, Vivo and OPPO,” it said in a note.

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 a Sprint store on Van Ness St in San Francisco, describing some customers moving to Apple.

[textmarker color=”C24000″]ROOM TO SHINE[/textmarker]

For consumers seeking immediate replacements for the Galaxy Note 7, it may be easiest to go with another Samsung phone, said O’Donnell at TECHnalysis. “You can’t write off Samsung,” he said.

Samsung is offering to exchange the Note 7s for its flagship Galaxy S7 models. A permanent end to Note 7 sales could cost it up to $17 billion, according to calculations based on analysts’ projected shipments of the device.

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.

 

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