Apple Watch may be a blessing in disguise for Samsung

Could Apple’s long-awaited iPhone and smartwatch launch actually be a good thing for Samsung Electronics?

The conventional wisdom, of course, is that the pair of new enlarged iPhones and the new Apple Watch smartwatch -- announced at an event in Cupertino, California, on Tuesday -- spell unalloyed doom for Samsung.

The South Korean technology giant has already been selling oversized high-end smartphones and smartwatches for some time, without any competition from its US rival.

And in the case of its oversized smartphone, the Galaxy Note, Samsung has been a trailblazer, creating a new popular product category and then mining it for several years of fat profit margins.

In wearable devices, as well, Samsung has been flooding the zone with no fewer than six smartwatches ahead of the Apple Watch’s debut on Tuesday.

While Apple’s entry into the smartwatch and oversized smartphone markets will likely reduce Samsung’s slice of the pie in each category, Samsung may not be sweating it too much, analysts say. Samsung declined to comment.

Apple’s entry into the smartwatch market “brings credibility, which may work to Samsung’s benefit”, says Jefferson Wang, a wireless and mobility consultant at Philadelphia-based IBB Consulting Group. “Samsung entered a white space, which they had to build up themselves, and it’s a heavy lift to get developers involved and build the ecosystem.”

That’s because, in the case of wearable devices, the idea of wearing a computer on one’s wrist is still so novel that -- no matter how big a slice of the market Apple takes -- Samsung executives believe the market can only grow from here, lifting all boats.

In that respect, the arrival of the Apple Watch is a good thing for Samsung: if Apple’s credibility and marketing heft can help turn the smartwatch from an oddball niche product into something that everyone should have, then how can Samsung complain?

Wang argues that the Apple-Samsung rivalry in smartphones brought out the both of best sides for consumers, and expects that to continue with smartwatches.

“They’re both going at it in different ways and, as in any new arena, there’s a lot of different ways to do this,” Wang said. “Consumers always want choice between two companies that people like to see go head-to-head.”

According to a study by Accenture’s Acquity Group published last month, the smartwatch market is set to grow quickly, with one in four US consumers set to purchase one over the next five years.

In anticipation of Apple’s oversized threat, Samsung has been working particularly hard to stem the potential damage to its Galaxy Note franchise, mocking the absence of a large-screen iPhone in a recent online ad.

Last week, at an event in Berlin, Samsung added a differentiating factor to its latest reboot of the Galaxy Note, introducing a limited edition variant called the Note Edge, with a screen that curves over the side of the device.

But that may not make much of a difference.