Samsung today announced its latest Note device, the Note8, which will be available in US carrier stores from September 15th. The comment below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan is available for further comment via email at jan@jackdawresearch.com or by phone at 408 744 6244 once the event is over (reporters at US launch event in New York can also find Jan there in person).
The new Note8 launches into a market with significant pent-up demand from loyal Note users who had to forgo last year’s upgrade cycle because of the recall. Given that Note users tend to be a pretty loyal bunch given the stylus and other unique features, the combination of pent-up demand and that loyalty means this should be a really solid upgrade cycle for Samsung.
But given that the size difference between the Note and the larger Galaxy S model is now tiny and the Infinity Display is common to both lines, the stylus has to justify the hundred-dollar-plus price differential more than ever, along with other features. And that’s why Samsung is also putting its first dual-camera setup and a more powerful processor into this device. Given that most US consumers now buy phones on installment or leasing plans, that price differential doesn’t matter as much as it might have in the past, but it might still give some existing Note users pause as they think about upgrading. Samsung has been pushing the boundaries on price with its last couple of launches, and we’ll have to wait and see how consumers respond to the pricing here, which is quite a bit higher than past Note devices.
Given how saturated the flagship smartphone market is at this point, the vast majority of sales in this category come from upgraders and switchers. Samsung should see strong upgrade activity from among its base of Note customers, and it may win some converts from other Android vendors now that its massive screen comes in a smaller package. But it’s less likely to win share from iPhone, given that Apple will announce its biggest upgrades in several years before this device goes on retail sale in the US. The dual-camera setup in the Note8 is clearly intended to compete with Portrait Mode on the iPhone 7 Plus, but Apple is likely to move that feature forward this year too, which may leave the Note8’s feature behind the higher-end iPhone especially.