"If the majority of smartphones sold in 2013 have larger than 4-inch screens, Apple isn't going to miss the market opportunity by sticking too long with its one-handed phone design," he says.
But it's not clear that Apple sees "market opportunity" the way Farber does. For one thing, Apple isn't offering "smartphone choice." It's offering "the iPhone," a specific brand that to date, still seems to be the most popular single brand (though the Samsung Galaxy S III, released in June, is at least closing in, in terms of unit sales).
It's not entirely clear how, or even whether, Samsung and Apple "compete" in smartphones. "The basis of competition is the aspect of an offering for which a customer is willing to pay a premium price," according to independent analyst Horace Dediu, in an August 2012 post at his Asymco blog. "It's hard to know (or to put your finger on) what the basis actually is, but we can test whether it's the same by measuring whether two products capture prices the same way. If one product that seems to resemble another can obtain price advantage consistently, then perhaps it's being bought for a different reason."
Didiu's numbers show the earlier Galaxy S models having some success in the U.S., but not matching iPhone sales, or growing in overall sales volume. These numbers were taken before the July 2012 introduction of the S III on U.S. mobile networks.
Two other charts show the difference between iPhone prices and Android smartphone prices. One shows that the unsubsidized prices for iPhone models have been considerably higher than for the Galaxy S I and II models, and have decreased at a much slower rate over time. The second chart compares "price erosion" for the iPhone models and for a wide range of Android smartphones over their first four quarters of sales: the Galaxy S models have much less erosion than many other models, but all the Android phones show significantly greater price erosion than the iPhones.
"Samsung's pattern is not unusual...," Dediu concludes. "Prices drop. It's a standard industry phenomenon. Therefore the question is not perhaps what is Samsung's basis of competition: it's the same as the overall phone industry. The question is, what is the basis of competition for the iPhone."
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