Apple’s Schiller Aims at Samsung Before Galaxy Debut

Apple Inc (AAPL). Senior Vice President Phil Schiller, seeking to steal thunder from his company’s main competitor in the smartphone market, touted the iPhone a day before Samsung Electronics Co. (005930) unveils its Galaxy S4.

Schiller, speaking in an interview yesterday, played down the market-share gains of Samsung and other device makers that use Google Inc (GOOG).’s Android mobile software. Apple lures four times as many Android smartphone owners to buy iPhones as it loses to rivals, he said.

“Our products are innovative, and customers are buying them,” Schiller said.

Samsung is scheduled to release a new version of its Galaxy S smartphone today in New York. The Korean electronics maker and Apple are grappling for leadership in the $294.5 billion global smartphone industry, using new devices, marketing campaigns and lawsuits that accuse each other of patent infringement.

Apple, based in Cupertino, California, pioneered the market with the 2007 debut of the iPhone. While the iPhone 5 is the top-selling individual smartphone, Samsung has become the leading provider overall by introducing a variety of devices with different designs and prices. Android, which runs on Samsung’s handsets, also has a wider following, commanding 70 percent of the smartphone-software market.

New Approach

Apple rarely speaks out about another company’s product releases, said Brian Marshall, an analyst at ISI Group.

“Apple is doing things that we have never seen them do in the past,” Marshall said. “Part of it is good because we could use more communication and dialogue, but at the end of the day it’s clear they are concerned.”

The Samsung Galaxy S4 is the “real deal,” and its 5-inch screen will appeal to customers, Marshall said.

Apple’s stock has fallen almost 40 percent from a record in September amid concerns about slowing profit and sales growth. Schiller defended the company’s performance and said the iPhone 5 was the best-selling smartphone ever. He cited data from market-research firm Strategy Analytics that said Apple’s iPhone 5 and iPhone 4S were the top-selling devices in the fourth quarter of 2012, ahead of Samsung’s Galaxy S3.

“What I see is a reality that we’re doing really well, and it’s not always being reported,” said Schiller, who runs marketing for Apple.

Bottoming Out?

Walt Piecyk, an analyst with BTIG LLC in New York, upgraded his rating on Apple to a buy today, even though he expects the company’s next quarterly earnings to miss forecasts. The stock is likely to hit bottom around that time, presenting a buying opportunity, he said.

“We think many investors are waiting for that moment,” Piecyk said.

Apple climbed 1 percent today to $432.50 in New York.

Samsung, whose advertisements criticize Apple, will unveil the Galaxy S4 at an event at Radio City Music Hall. The new device is cranking up the pressure on Apple, said Abhey Lamba, an analyst at Mizuho Securities USA Inc.

“Competition is becoming more intense,” he said.

Schiller said devices that run Google’s Android operating system don’t run smoothly, and many customers are running outdated versions of the software. By contrast, more than 300 million Apple customers are using its most recent iOS mobile software, Schiller said. He also said Android is typically used in phones that are given out in promotions.

“Android more and more is being used as a giveaway phone,” he said.

Christopher Katsaros, a spokesman for Google, and Adam Yates, a spokesman for Samsung, declined to comment.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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