Why 2017 Will Be A Important Year For The Premium Smartphone Market

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2017 is shaping up to be a very interesting year for the high end of the smartphone market, for multiple reasons. Firstly, demand for premium smartphones should grow further, as first-time smartphone customers from a few years ago upgrade to more capable and potentially expensive devices. Secondly, things should get more interesting from a tech perspective, as vendors shift to significantly lower-power processors (moving from 14nm to 10nm) allowing for smaller designs and better battery life, while rolling out more software features that leverage AI and machine learning. Competition is also expected to heat up, with Apple (NASDAQ:AAPL) working on a completely redesigned device and Samsung Electronics (OTC:SSNLF) looking to make a strong comeback after last year’s Note 7 fiasco. Moreover, Internet behemoth Google (NASDAQ:GOOG) should also play a more important role in the market as it ramps up sales of its well-reviewed Pixel devices. Below we provide a brief overview of what to expect from the major premium smartphone players in 2017.

See our complete analysis for AppleGoogle and Samsung 

Samsung Will Launch S8, Double Down On Software Offerings

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This will be a crucial year for Samsung Electronics’ smartphone unit, as the firm looks to bounce back from a challenging 2016, which saw it discontinue its Note 7 phablet after several instances of battery fires. The company will launch its latest flagship handset, the Galaxy S8, which is expected to sport some design changes along with significant spec bumps that potentially include Qualcomm’s latest Snapdragon 835 app processors as well as innovations from Samsung’s components arm. We also expect to see two changes on the strategy front. Firstly, Samsung is likely to take some steps to differentiate itself, delving deeper into the software and cloud based services space. For instance, the firm is expected to launch its own AI-based voice assistant with the S8, reducing its reliance on Google’s products. Secondly, Samsung might also become more conservative with respect to its product development cycles and designs, which have typically been more aggressive compared to its rivals, as this was at least partly responsible for the Note 7 issue. The firm is expected to launch the S8 in mid-April, over a month later than the launch schedule it adopted with the Galaxy S7. (With Its Hardware Called Into Question, How Will Samsung Differentiate Itself?)

Google’s Smartphone Star Could Rise As It Beefs Up Pixel Brand

Google could increasingly become a force to reckon with in the high-end smartphone market, as it ramps up sales of the Pixel handsets that it launched last fall. Google’s strategy with the Pixel appears to be two-fold. The top end of the smartphone market accounts for almost all the industry’s profits, and Apple practically dominates this space, capturing over 90% of total profits. With the Pixel, Google is emulating Apple’s model of offering tightly integrated software and services with high-end hardware, in order offer a premium experience. The company is also likely to be banking on the Pixel to bring in more high-value customers to its Android platform, as it looks to improve ad-impression rates, which are typically much higher on Apple’s iOS devices. (What Does Google Aim To Accomplish With The Pixel?) We expect Google to ramp up Pixel sales during the year, potentially improving its distribution footprint, while partnering with more carriers (Verizon was the only U.S. carrier partner at launch). Morgan Stanley expects the device to see sales of as much as $3.8 billion in 2017. The company is also likely to launch new versions of the Pixel this year. While the first generation Pixel is well reviewed, it sports a relatively staid design and lacks many standout hardware features. We could see Google address these issues in 2017.

Apple Will Garner Most of The Buzz As It Launches 10th Anniversary iPhone

This year will mark the 10th anniversary since the launch of Apple’s first iPhone. We expect the company’s performance over the first three quarters of the year to only see a slight improvement over 2016, as the iPhone 7 – which only offers incremental improvements over the iPhone 6S – remains its flagship offering through September. However, the company is expected to launch a completely redesigned smartphone, sporting an edge-to-edge OLED display and other enhancements such as a 10nm chip set, during the fall. This could potentially set off a super-upgrade cycle of sorts for Apple, since it would mark the first complete iPhone re-design since September 2014. Apple often uses design refreshes as an opportunity to boost its ASPs, and the company could position the new device above its current offerings as it looks to offset rising components costs. (related: Apple’s Flagship iPhone Keeps Getting More Expensive To Build)

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