Samsung heads into Galaxy S IV launch with marketing advantage, supply chain concerns

Samsung Electronics will take the wraps off its Galaxy S IV smartphone tomorrow in New York City, but it already has one advantage over rival Apple (NASDAQ:AAPL): it's spending more on marketing.

Through sheer force of marketing will, as well as continued advancements in its hardware and software, Samsung has built itself into the world's largest smartphone maker. After being outspent by Apple in 2011, Samsung spent $401 million advertising its phones in the United States, outpacing Apple's $333 million, according to data from ad research and consulting firm Kantar Media and cited in the Wall Street Journal.

It should be noted though that, despite Samsung's spending, analysts said in February that Apple actually claimed the top smartphone spot in the U.S. market in the fourth quarter, beating out Samsung. Much of that was driven by demand for Apple's iPhone 5, which was released late in the third quarter of 2012.

As Samsung prepares to unveil the Galaxy S IV--and the world waits to see if can live up to the hype that has built ahead of the device's announcement--analysts are looking to Samsung's vaunted supply chain to see if the company can keep up with the expected demand for the new phone. According to Reuters, analysts think Samsung could top 10 million unit sales in the first month after the gadget's launch. Last year manufacturing glitches related to handset casings forced Samsung to slightly delay the rollout of its S III smartphone, troubles that cost Samsung around 2 million units of lost sales in the month after it launched the S III in May 2012.

This time, Samsung appears to be gearing up to meet demand and keep supplies flowing. "Based on checks we had with suppliers, Samsung has already done significant work to ensure smooth supply and not to repeat what they had to deal with last time," Lee Seung-woo, an analyst at IBK Securities, told Reuters. "For now it appears there's no major issue at all, but obviously we have to wait and see how smoothly it goes after the launch."

From Samsung, the Galaxy S IV launch will be its first as the world's undisputed global smartphone leader, a position it has attained in large part on the back of Google's (NASDAQ:GOOG) Android platform. According to Bloomberg, which cited unnamed sources, the new phone will not have the eye-scrolling technology a recent New York Times article described, which would allow the phone to scroll down an article by tracking a user's eye movement.

The Bloomberg report said the phone will instead have a more simplified version of the technology, which could, for example, pause videos when the user's eyes move away from the screen. Samsung is expected to beef up the S IV's hardware, but many analysts and investors will be looking to see what Samsung does to enhance the software and services available on the phone.

"With so many great things speculated about the S IV, it could actually disappoint in terms of wow factors," David Choi, an analyst at SK Securities, told Reuters. "If you see Samsung's share price, which hasn't moved much of late, I think you can get a more cool-headed assessment of what's coming."

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this Bloomberg article

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