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Can the Samsung Galaxy S4 Break the BlackBerry-Apple Stranglehold on Business Customers?

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The Galaxy S4 touts a new security feature that is aimed at winning over the enterprise market.

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With a new iPhone (NASDAQ:AAPL) at least three months away, it's safe to assume that the newly launched Samsung (PINK:SSNLF) Galaxy S4 will surge to the top of the consumer smartphone market.

But with the new device, Samsung is looking beyond its fight with Apple. It has also setting its sights on supplanting BlackBerry (NASDAQ:BBRY) in the business world.
The Galaxy S4 will be the first Samsung device to feature its new security application, Knox.

Similar to BlackBerry's Balance system, Knox allows customers to create an isolated and encrypted container to store work applications and information -- such as corporate email and business contacts -- safely and separately from personal applications. Samsung says that this will prevent malware attacks and kept sensitive data from getting stolen.

"Easily accessible via an icon on the home screen, the Knox container presents a variety of enterprise applications in a secure environment including email, browser, contacts, calendars, file sharing, collaboration, CRM, and business intelligence applications," said the company in a statement.

While there are plenty of third-party Android (NASDAQ:GOOG) and iOS apps that offer similar dual-workspace solutions, Samsung's Galaxy S4 will be the first to come pre-loaded with it.

Could Knox help Samsung to gain market share in the enterprise arena? Currently, the BlackBerry and the iPhone are neck-and-neck in this market, with BlackBerry's strong historical advantage having been eroded thanks to the rising popularity of "Bring Your Own Device" (BYOD) policies in recent years

(See also: Blow to BlackBerry as Pentagon Opens Up Network for Apple and Google.)

Android devices, while not far behind the leading duo, have always been considered to be more susceptible to security breaches. According to a report by security firm Kaspersky, a whopping 99% of mobile malware were written for Android in 2012. Samsung itself admitted late last year to a security flaw in the Galaxy S3 that made it vulnerable to malware attacks.

"It remains to be seen how effective the security controls Samsung is putting in place actually are. We'll see if there will be fewer incidents of malware on the devices," Rohit Sethi, head of product development for security firm SD Elements, tells Minyanville.

"I think what's going to happen with Knox is [that] you will have companies who believe Samsung's claims right off the bat and they'll be the early adopters," Sethi continues. "And Samsung will have to show that those early adopters are successful in reducing the number of malware-infected phones in their portfolio because most companies will not roll out [Samsung smartphones] until they see that Knox is successful."

While the Galaxy S4 will be the first Samsung device to feature Knox, the company will likely include the feature in its tablets as well in its bid to grow in the enterprise tablet market. Right now, the iPad is the all-conquering business tablet, with a 93.2% share of the market in the fourth quarter of 2012. Android's share was only 6.8%, with the Galaxy Tab, Motorola Droid Xyboard, Galaxy Note, Asus (PINK:AKCPF) Transformer, and Amazon's (NASDAQ:AMZN) Kindle Fire among the top Android tablets.

(See also: Despite Android's Rise, the iPad Remains the Undisputed Top Tablet Among Business Users.)

However, if Samsung can convince businesses to use its smartphones, it stands a good chance of getting them to use its tablets, too, says Sethi.

"If people are already going to be using Samsung phones with the same Knox infrastructure, then it makes it really attractive to use the tablet as well, as they will all have the same infrastructure that can be centrally managed," he argues.

As for the BlackBerry, whether or not it can recover its lost lead in the business world will depend on the reception of its Z10 and Q10 devices, according to Sethi.

"[BlackBerry's comeback] has very little to do with enterprise security and a lot to do with the end-user experience and app infrastructure. If customers like and are willing to use the BlackBerry 10 devices, then it will do well," Sethi says. "But if the devices don't capture market share, from an end-user perspective, like BlackBerry hopes they will, then it will affect the number of companies that end up using the phone."

(See also: Can Research In Motion Stop the Apple and Google Onslaught in the Enterprise Arena? and Riding the Korean Wave: How K-Pop Stars Have Helped Lift Samsung to the Top in Asia)

Twitter: @sterlingwong

Disclosure: Minyanville has a business relationship with BlackBerry.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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