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As Apple fans await new iPhones, Samsung and others offer thinner, sleeker models

NEW YORK — The latest iPhone looks much like the first iPhone, which came out more than five years ago. That hasn't been a problem for Apple — until now.

The pace of iPhone sales has slowed, Apple revealed last week. Part of the problem is that the competition has found a formula that works: thinner phones with big screens that make the iPhone look small and chubby.

For a dose of smartphone envy, iPhone owners need to look no further than Samsung Electronics, the No. 1 maker of smartphones in the world. Its newest flagship phone, the Galaxy S III, is sleek and wafer-thin.

Apple has become the world's most valuable company on the back of the iPhone, which makes up nearly half of its revenue. Sales of the iPhone are still growing, but the question of how fast is of keen interest to investors. And the iPhone has room to grow: Only one in six smartphones sold globally in the second quarter had an Apple logo on its back.

When Apple reported financial results for its latest quarter last week, a new phenomenon was revealed: Buyers started pulling back on iPhone purchases just six months after the launch of the latest iPhone model.

Apple executives blamed the tepid sales on "rumors and speculation" that may have caused some consumers to wait for the next iPhone, which is due in the fall. But in the past, iPhone sales have stayed strong nine months after a new model is launched, then dipped as people began holding off, waiting for the new model.

In the April-to-June period, Apple sold 26 million phones, 28 percent more than it did in the same quarter last year.

Most other phone manufacturers "would kill" for those numbers, says Stephen Baker, an analyst with research firm NPD Group.

The exception is Samsung, which has solidified its position at the world's largest maker of smartphones. Analysts believe it made just over 50 million smartphones in the second quarter, or nearly twice as many as Apple. (The company doesn't release specific figures.) Its smartphone sales have nearly tripled in a year.

Though Apple is known as a relentless innovator, the iPhone's screen has been the same size — 3.5 inches on the diagonal — since the first iPhone came out. It was a big screen for the time, but among the competition, screen sizes have crept up.

Samsung has increased the screen size of its Galaxy series with every model since it debuted in 2010. The Galaxy S had a screen that measured 4 inches diagonally, followed by the S II, at 4.3 inches. The S III, the latest model, measures 4.8 inches — much larger than the iPhone's screen. Yet the Galaxy is thinner and lighter than an iPhone.

Aside from design, Apple is inflexible in another way: By releasing only one new phone per year, it lets the competition create new phones with features the iPhone doesn't have and lets them go unchallenged, at least until the new iPhone comes out.

Samsung, Apple battle in court

A trial pitting Apple against Samsung kicked off Monday in federal court in San Jose, Calif., with jury selection under way in the closely watched patent-infringement case. The case is expected to last four weeks. Apple and Samsung have been lobbing patent-infringement claims against each other for months as the world's two largest smartphone makers compete in the fast-growing mobile device industry. Apple has accused its rival of "slavishly" copying many aspects of its mobile devices and is seeking $2.525 billion in damages for what it calls "irreparable harm" to its business. Samsung maintains that it did not steal ideas from Apple and instead accuses that company of infringing on its technology patents.

Los Angeles Times

As Apple fans await new iPhones, Samsung and others offer thinner, sleeker models 07/30/12 [Last modified: Monday, July 30, 2012 8:25pm]

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