Samsung Galaxy and Apple iPhone 4S to Reap Good Harvest this Holiday Season

Apple's long-awaited iPhone 4S and Samsung Electronics' fresh, broad offering are likely to stand out in this holiday season's smartphone sales which will otherwise be clouded by global economic uncertainty.

Apple, which lost its position as the world's largest smartphone maker to Samsung last quarter, could regain top spot as consumers rush to buy the latest iPhone after waiting 16 months since the previous model went on sale.

Like millions elsewhere, 36-year-old Vanessa Pigeon last week took up an offer from her telecom operator and replaced her aging Blackberry with the latest iPhone.

I liked the design and I wanted to change for a long time, said Pigeon, a recruitment official in Paris.

In neighbouring Britain, which is often seen as the indicator for the rest of the European market, the iPhone took a whopping 43 percent market share in October, overtaking phones using Google Inc's Android platform, according to research firm Kantar Worldpanel ComTech.

It's really only the iPhone family and the (Samsung) Galaxy family flying off the shelves. Everyone else is just picking up the leftovers, said Neil Mawston, analyst at research firm Strategy Analytics in Milton Keynes, Britain.

HTC and Research In Motion - No.4 and No.5 smartphone vendors - have already warned of weak holiday sales. The year end is a key sales season for smartphone vendors as consumers often replace their models for the holidays.

Vendors are expected to sell a total of 142 million smartphones in October-December, up 42 percent from a year ago, according to a Reuters poll of analysts.

NO SANTA?

At this moment we're still doubtful on whether we'll see any seasonality this Christmas because the demand we see so far is very bad, said Bonnie Chang, analyst at Yuanta Securities in Taipei.

Overall phone sales have been shrinking in western Europe this year as consumers delay purchases in a tighter economy. Analysts expect sales of non-smartphones to stay on a par with year-ago numbers.

Smartphone sales growth, which is driven by swapping for more advanced models, has slowed over the year.

For Europe, Q4 will not be the usual bonanza. The economy is pushing consumers to be pickier, said Gartner analyst Carolina Milanesi, adding this played to the advantage of Samsung and Apple.

Sales of Apple's iPhone have surged since early October when the iPhone 4S model became available, and the company is expected to sell around 28 million iPhones in the quarter, a 70 percent surge from a year ago.

Samsung's handset sales this year broke a new annual record by the end of November, boosted by good demand for its flagship Galaxy S II model, whose sales reached 10 million units, the company said a week ago.

The Reuters poll does not break out Samsung smartphone sales as the firm does not report the number, but five analysts forecast those sales should be similar to that of Apple.

Sales of Nokia products will also be closely watched in the quarter for first reactions to its Windows Phone models, although most Nokia smartphones are still powered by its own ageing Symbian software.

I don't think Nokia joining the force can make a difference, said Yuanta Securities' Chang, noting that HTC and Samsung models using latest Windows Phone software have not fared well.

Analysts expect Nokia's smartphones sales in the fourth quarter to fall 31 percent from a year ago to 19 million phones as the new Windows Phones will not yet compensate for diving Symbian sales. Still, that would be well ahead of HTC's 11 million and RIM's 14 million.

BLACK PLATES WITH BIG SCREENS

With the proliferation of touchscreens and half of all smartphones sold using Google's Android operating system, consumers are struggling to see the difference among the models.

Everybody is just buying black plates with big screens, said Strategy Analytics' Mawston.

Most top models also have 8 megapixel cameras among other similar features.

If you look at the phones there is nothing particular really there, said Canalyst analyst Pete Cunningham. It's a really tough market and it is going to get tougher.

Chinese vendors ZTE and Huawei have started to win market share with their cheap smartphones using Android, and cut-price competition is set to continue with chipset supplier Spreadtrum unveiling last week a platform for $40 Android phones.

And the market seems to only be getting more crowded. Last week, Japan's Panasonic Corp said it would return to the European smartphone business next year, six years after it abandoned overseas sales of feature phones.