It's Too Early to Count Samsung Out
There is very little doubt that Samsung is a robust consumer electronics success story that, despite some pretty brutal tactics, should be respected for what it is -- a winner. While the headlines lambaste Samsung for selling "only" 9 million Galaxy S4 smartphones in its most recent quarter, it's important to consider the following:
- The Galaxy S4 is nearing the end of its life with a Galaxy S5 imminent, so claiming that the Apple iPhone 5s gaining share is the reason for Samsung's sluggish sales is probably partially true, but not as dramatic as one would initially think.
- The Galaxy S4, while a significant improvement over the Galaxy S3, was still very similar to the S3. A revamped design with the S5 (including, say, a fingerprint sensor, among other things) could go a long way to winning back share.
- There are likely more people looking to upgrade (due to contract timing) from a Galaxy S3 to a Galaxy S5 than there were folks with a Galaxy S2 to a Galaxy S4 (assuming two-year contracts).
Samsung could have a window of opportunity
With the previous points in mind, it's not lost upon this Fool that Apple stands to gain some pretty serious market share when it launches its next-generation pair of iPhones (rumored to measure in at 4.5" and 5", respectively). When Apple launched its iPad mini, even at a pretty hefty $329 price tag, it sold like hotcakes against peers such as the Nexus 7 and Galaxy Tab 7" and 8". People simply love the Apple brand and the ecosystem, and if Apple has products at all screen-sizes and form factors, it is in a great position to gain share.
That said, the iPhone 5s is likely to go relatively "stale" after the upcoming launches from the various Android players at Mobile World Congress in February. This gap between the launch of a next-generation Galaxy S5 and the launch of a next-generation iPhone could give Samsung an opportunity to really lay on the marketing. Further, at least from a hardware standpoint, the Galaxy S5 is likely to be very "buzzword compliant," which could further help it distance itself from the rest of the Android competition.
The iPhone 5s may be more resilient than expected
The biggest risk to this thesis is the iPhone 5s proving to be much more resilient than it was given credit for in the preceding discussion. If this turns out to be the case, and given the recent China Mobile deal, it very well may, then a next-generation Galaxy S5 with a ton of buzzwords and flashy specifications may end up failing against the sheer staying power of Apple's iPhone 5s -- even if Samsung goes ahead and copies the fingerprint sensor idea that Apple (arguably) perfected with the 5s.
Foolish bottom line
We'll have to wait and see how well Samsung's next-generation Galaxy S5 does against the iPhone 5s and, later in the year, against Apple's next-generation bigger iPhones. While the picture looks pretty grim for Samsung with regard to Apple, it isn't over 'till it's over.
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The article It's Too Early to Count Samsung Out originally appeared on Fool.com.Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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