Singapore seizes Galaxy Note 3 with both hands

Singapore seizes Galaxy Note 3 with both hands

Just a week after the launch of the new iPhones, consumers opened their wallets yet again on Thursday, this time to Samsung and its palm-busting, 5.7-inch phablet, the Galaxy Note 3.

As the Note 3 went on sale, both SingTel and StarHub said the phablet saw more than double the interest garnered by its predecessor - the Note II - which was launched last year.

At SingTel, 23,000 registrations of interest for the Note 3 were received online earlier this month.

While this paled in comparison to Apple's new iPhones, which saw registrations of interest just shy of 40,000 two weeks ago, the numbers were significant for Samsung, which has demand dispersed across a product line that is more disparate than Apple's.

"The Note 3 is certainly one of the most popular Android phones that we have sold," a SingTel spokesman told The Business Times.

At M1, sales were brisk, both because of robust demand and improved supply. "As Samsung has made available a better supply of stock this time around, we expect a positive take-up rate for the device," an M1 spokesman said.

Even as supply flowed better this time around, the white version of the Note 3 had sold out at the telco's Paragon outlet within 90 minutes of its opening.

While some have baulked at the Note 3's large size, 27-year-old Aesel James turned up at 4.30am for SingTel's Note 3 launch yesterday, unfazed by the phablet's proportions.

"I like the bigger screen for viewing videos and other things," said Mr James, who upgraded from the smaller Galaxy S3.

This preference for larger screens applies across telcos. "Singapore consumers started taking greater interest in phablets last year when phone manufacturers rolled out attractive and competitively priced large-screen devices," a StarHub spokesman said. "We believe phablets have mainstream potential, and the popularity of such phone-tablet hybrids will continue to gain momentum."

While the gold-coloured iPhone 5s had been last weekend's sleeper hit, initial observations suggest that consumers have yawned in the face of Samsung's Galaxy Gear smartwatch.

BT understands that interest in the smartwatch, sold as a companion device to the Note 3 - and, eventually, other Samsung phones - was lukewarm at best. Registered Note 3 buyers held off on buying the doodad on Thursday, even though a $100 discount was offered off the $488 sticker price.

Ambivalent noises about the smartwatch also reportedly came out of Seoul earlier this week, with a Samsung executive calling the watch a "wow product" while conceding in the same breath that the device "lacks something special", according to the Korea Times.

As the Note 3 went on sale in more than 50 countries on Thursday, the stakes were high.

Samsung's Galaxy S4, launched in April, has seen disappointing sales so far, with some analysts cutting expectations from 80 million units to 60 million units to be shipped this year.

At the same time, trepidation is high where the Note 3 is concerned. Priced in the premium range - it retails here for $1,048 - the release comes at a time of slowing sales for high-end smartphones.

That said, analysts' expectations for the handset are generally upbeat. A report by Nomura Equity Research earlier this month expected "healthy demand" for the device, projecting more than 13 million units in sales by year-end.

The older Galaxy Note and Galaxy Note II have seen combined sales of about 38 million units, according to some reports.

In its opening weekend alone, Apple sold nine million units of the iPhone 5c and 5s in total.

Even so, a margin contraction might loom at Samsung. The Note 3 has been estimated to have a higher bill of materials (BoM) cost compared to the Galaxy S4, because of the former's more expensive components, larger screen size and greater number of sensors.

"It looks difficult for (Samsung) to pass on the BoM cost increase to the product price since the premium smartphone price tag has been capped by Apple's iPhone selling price," said a report by Macquarie Equities Research last week, referring to the Note 3.

"As a result, its premium smartphone has to absorb the cost increase, resulting in margin contraction."

Samsung is far from done for the year. Next month, it will unleash a smartphone with a bendable display on the South Korean market. A cheaper Note 3 variant is also rumoured to be scheduled for launch later this year, for global customers.

Though Samsung remains ahead of Apple on global smartphone sales market share, it will look over its shoulder at its rival, which is reportedly tinkering with its own smartwatch and flexible display.


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