(Corrects spelling of analyst name in fifth paragraph)
* Apple iPhone 4S fails to impress investors, fans
* Scope for rivals to grab market share ahead of Christmas
* Samsung up 1.7 pct, LG rises 0.4 pct, HTC edges up 0.6 pct
* Shares in Apple's suppliers decline
* Low price could also help Apple expand into developing
By Clare Jim and Miyoung Kim
TAIPEI/SEOUL, Oct 5 Asian smartphone makers have
a chance to exploit a rare letdown from pacesetter Apple Inc.
after the new iPhone 4S failed to wow fans and
investors, leaving Android rivals better placed to grab market
The iPhone -- introduced in 2007 with the touchscreen
template now adopted by its rivals -- is the gold standard in
the booming smartphone market, and its sales have dealt a blow
to ambitious plans of many competitors.
Shares of Samsung Electronics , HTC and
LG Electronics , who all make phones using Google
Inc.'s Android operating system, ended up on Wednesday.
These companies could now aggressively promote their
flagship high-end models ahead of Christmas, potentially helping
boost sales in the most crucial shopping season.
"Apple no longer has a leading edge, its cloud service is
even behind Android; it can only sell on brand loyalty now,"
said Gartner analyst C.K. Lu in Taipei.
"Users may wait to buy the next iPhone, if they can't wait,
they may shift to brands with more advanced specs."
The new iPhone 4S is identical in form to the previous
model, disappointing fans who had hoped for a thinner,
bigger-screened design of a product that had not been updated
for more than a year.
While the device's high-tech wizardry such as voice commands
-- for sending messages, searching for stock prices and other
applications -- caught the attention of many analysts, it might
not be enough to make it a must-have for consumers.
"Major concerns for Samsung had been that its smartphone
momentum will decelerate with Apple's new iPhone, but that's now
less of a concern as the new iPhone failed to excite many," said
Kim Young-chan, an analyst at Shinhan Investment Corp in Seoul.
Shares of Taiwanese smartphone maker HTC rose 0.6 percent in
a weaker Taipei market, while Korean rivals Samsung and LG
climbed 1.7 percent and 0.4 percent respectively, in a broader
Korean market down 2.3 percent.
MID TO LOW-END STRATEGY
However, Apple's move to price the iPhone 4S from $199 in
the United States, and analysts' estimates of lower price points
in major countries, could help the company expand in developing
markets such as Asia, Samsung's backyard.
Apple is cutting the price of the older iPhone 4 to $99, and
said an even older 3GS model will be available for free to
customers who sign a long-term contract. This might allow Apple
to take a bite out of a low-end market it had eschewed.
"The continued sales of the iPhone 4 and 3GS are a bigger
story, because they represent the best answer Apple has to its
strategy for emerging markets and the low end of the smartphone
market," said Ovum analyst Jan Dawson.
Even before the low-cost phone, Apple was set to
exponentially grow its China business as it stitches deals with
operators in the world's largest mobile phone market, home to
more than 900 million subscribers.
Apple faces a tough battle in India, the world's
second-biggest market for mobile phones with more than 850
million subscribers, where smartphones account for just over 5
percent of the total mobile handset sales.
"Very aggressive pricing in the higher-end category of
smartphones is unlikely in India in the near future, primarily
because the volumes are not strong enough to justify that kind
of play in that segment," said Deepak Kumar, research director
at IDC India.
TOP SELLING SMARTPHONE
Phones based on Google's Android, which is available for
free to handset vendors such as Samsung, HTC, LG and Motorola
, have a greater combined market share than Apple's
iPhone, which is still the world's No. 1 selling smartphone.
"There are still many consumers who don't have the iPhone
experience, and Apple still has a lot of markets and carriers to
enter, so when there's a new model with better specs, it helps
to lift shipments," said Ming-chi Kuo, analyst at Concord
Securities in Taipei.
"The iPhone 4S targets users who are expiring on their
two-year 3GS contract."
Globally, iPhone shipments rose 9.1 percent in the second
quarter while Nokia's plummeted more than 30 percent, handing
the top spot to Apple with a market share of 18.4 percent,
according to IHS iSuppli. Samsung, whose shipments grew faster,
is coming on strong with a market share of 17.8 percent.
The lukewarm reception of the new phone hit shares
in Apple's suppliers.
Taiwan's Hon Hai , Apple's biggest supplier, was
down 1.9 percent, while casing company Foxconn Technology
fell 6.9 percent. Camera module maker Largan Precision
shed 6.6 percent.
"The casing companies should be the most-hit, correcting
from the previous rise, because the market has expected a metal
case for the new iPhone," said Mike Fang, a fund manager of
Paradigm Asset Management.
Fang did not expect iPhone shipments to drop on the
disappointment over its appearance however, as a cheaper price
would allow sales to expand at a faster pace.
"The demand is still there from users upgrading from iPhone
3GS because it's two generations behind," he said.
In Japan, the country's second-largest mobile carrier KDDI
will sell Apple's new iPhone, ending rival operator
Softbank's highly profitable reign as the sole provider
(Additional reporting by Argin Chang in TAIPEI and Devidutta
Tripathy in NEW DELHI; Writing by Anshuman Daga; Editing by Alex