The Day the iPhone Died?

With Samsung scheduled to release the new Galaxy S IV powered by Google's Android OS tonight, many have speculated that this will be the moment when Apple's (NASDAQ: AAPL  ) iPhones loses the top spot among smartphones, possibly forever. Of course, there is an equally large contingent of Apple supporters and tech insiders that believe the latest addition to the Galaxy line will be as underwhelming an advance as the iPhone 4S was for the iPhone 4. While some of the new tech that may be included in the device has potential, an underwhelming release could be a huge reinvigoration for the iPhone maker.

Ultimately it is Samsung's broad market approach that poses the greatest threat to its Cupertino brethren. Recent reports suggest that in addition to the release of a new flagship Android device, the Korean company is planning to release a 4G LTE smartphone in the Indian market with a roughly $100 price tag. By hitting every price point in the market, Samsung is making it hard for any other company to keep pace.

What to expect from the Galaxy S IV
The only devices that have more speculation surrounding their release are iPhones, and Samsung has learned from that, building hype through carefully crafted advertising. In 2012, Samsung spent more on advertising than Apple, spending $401 million in the U.S. as compared to the $333 million spent by Apple. Central to Samsung's campaign has been the tag line "The next big thing is here," which has helped the company poke fun at Apple. The response from Cupertino has been a series of ads that highlight how much sense iPhone makes. For example, Apple has asked us to see the common sense of a smaller screen because that is how far our thumbs can reach.

This ad divide provides a natural segue to some of the new features of the Galaxy S IV. Among other advances, the new device is expected to follow the trend of previous Galaxy updates, bringing users a larger screen. The new device is expected to include a nearly 5-inch screen to go with an OLED screen and potentially the ability to scroll through websites using a new eye-tracking technology. Additionally, the new smartphone will have an upgraded camera.

U.S. models will likely utilize a Qualcomm (NASDAQ: QCOM  ) processor; non-U.S. versions will likely get Samsung's own eight-core processor. The inclusion of the Qualcomm chip, if this is indeed the direction taken by the company, comes as a reaction to supply constraints already being faced by the company. Supply chain issues proved a major problem for Apple with the release of the iPhone 5 which, despite record sales, was believed to have been limited by availability problems.

The low end of the spectrum
According to a recent release from the Times of India, the native Reliance Industries has selected Samsung to help it spearhead the buildout of a 4G LTE network in that country. Associated with the initiative is the expected rollout of a $100 smartphone from Samsung to help secure the position of the new network. Android Authority explains the importance of the move for the smartphone maker: "Samsung devices are already incredibly popular in the country, and this step will only help the company capture an even larger piece of the market share in the third largest mobile consumer base in the world." The importance of emerging markets are not a new part of the discussion, but Samsung's success in leveraging Android to capture increasingly large market share in these markets is critical. While China has been the biggest focus, given the immense size of that market, India should not be overlooked.

The move by Samsung is particularly significant given the power of the connection it is potentially forging. The Times of India also reports: "Samsung will not be just another vendor to RIL supplying handsets as it was when Reliance Infocomm was launched in 2002. They are seeking a much broader role. A possible joint venture could also be in the offering." This low-end development could be as important to the company as the release of the new Android device in the U.S.

A real iPhone killer?
It is obviously difficult to make any informed claims about the S IV relative to the iPhone until the new device is unveiled. With this being said, expectations are high. If the new Samsung smartphone comes even close to meeting expectations, this may be the catalyst needed to push Apple below the $400-a-share level. While I would not necessarily sell Apple shares ahead of the release, I would be prepared for some real volatility on the news. If the new product does not measure up, it may be the positive catalyst Apple has been needing to get back on track. This release is as important for Apple as Samsung.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (7) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 14, 2013, at 6:31 PM, ConstableOdo wrote:

    All I can say is neither Kia, Toyota or Nissan has put Porsche out of business and I doubt they ever will. You build a good product for those willing pay for it and a company will thrive through good times and bad. Samsung's good fortune should not mean Apple's bad fortune especially as long as the smartphone market is expanding.

    I don't care if Samsung does offer a $100 4G smartphone for India. What does matter is whether Samsung has razor thin profits or is losing money on those sales. Nokia was once a market leader in those third-world nations and it didn't help Nokia one bit and in fact probably hurt Nokia by pulling down its margins.

    There's absolutely no proof at all that the majority of consumers want smartphones with large displays or that the trend will stay. Apple needs to build quality smartphones, have a sound ecosystem and continue to give good customer service. Those basics will keep Apple making profits and I believe Apple will continue to thrive.

  • Report this Comment On March 14, 2013, at 6:50 PM, dougiefla wrote:

    Samsung already outsells Apple worldwide, and the rest of the world doesn't hold as high an opinion as Americans do.

  • Report this Comment On March 14, 2013, at 6:51 PM, Burstedbladder wrote:

    I just think it's stupid that Apple makes a product, sells it at a ridiculous price, and then less than 6th mths, they have a newer version of the iPhone and iPad.

    Get over it Apple. You are not the only inventor in the world, and the bottom line here is, the people made the iPhone a success with their designs they sent to your company and letting you at Apple know what they wanted.

    When iPhones sell for 99 to 150 and are unlocked, and you don't have to sign up for some bs data plan either, then and only then I will buy one, but for now, my Samsung phone works fantastic. In fact, some of my friends that used iPhones are now using Samsung phones.

  • Report this Comment On March 14, 2013, at 7:47 PM, ddbfool wrote:

    What was that famous Mark Twain quote? "The reports of my demise are greatly exaggerated"?

  • Report this Comment On March 14, 2013, at 7:52 PM, PaulApp wrote:

    Only in America! Apple has no market outside the United States!

  • Report this Comment On March 15, 2013, at 12:45 AM, mark328 wrote:

    There is a reason why Porsche is no longer a stand alone independent company - it couldn't compete with the mass market leaders and thus was bought out by Volkswagen, the Toyota of Europe. Porsche, Lambo, Bentley, all just a division of Volkswagen, the mass market seller. You can't sell premium products only and be a "luxury" item if you want to keep revenues up with the mass market leaders. Keep that nose turned up higher - you won't see that cliff you're about to walk off of.

  • Report this Comment On March 15, 2013, at 6:50 AM, ArmorNCO wrote:

    Most of the features on the new Samsung I already have. Back in February last year Cnet did a review and called the new LG a Super Phone. It launched in November (I believe) and in January I bought it. Cnet said it was going to be far better than an iPhone. I own an iPhone 4S for business and can state by comparison, the LG is a far better phone. It also has a near 5 inch screen. To me this is not a negative (As Apple proclaims), I have always been of the opinion I didn't need it, since I had a Kindle. Well, I no longer use my Kindle except if I am laying in bed and want to mess with some apps. 99% of the time, while on the road, I now use the LG. Not much difference really for what I need it for, and tons more options. The LG (Which is the LS970) also has a quad core CPU. It has a true HD-IPS display and is perfect for the times while on the road if I have to pull in a rest stop, to bring up netflix and watch Family Guy. It has 2 GB RAM and no external storage, would have liked it, but not neccesary as it comes with 32GB built in. Sound quality and volume is excellent. It has front and rear facing 13 MP cameras. I never used to use the camera on my cell phones. I am a photo buff and carry a DSLR with me wherever I go. But this one, I use constantly. Photos are crisp and there are a ton of options built in for these cameras I never had in any other phone. It also has 1080p@30fps, and takes great vids. The quad core is a Qualcomm (Just like the Samsung) as well as the chipset. The mic has active noise cancellation, which for me is a great thing because I am always using it for a voice recorder outdoors. Has a built in Java MP emulator. Anyway, there is a lot more, other than the OS, I have no problems with it. Its running ICS and I would prefer it to run JB. Not that whole heck of a lot of difference. Its really fast, boots up in seconds, unlike my old LG that took 2 minutes. Far faster than my iPhone. It is 4G. The best part is the price. $199, buy one get one free (We use Sprint). I still need to keep my iPhone for business. But if the Samsung is anywhere near better than the LG, then Apple is going to have a problem. Everyone else is coming on strong.

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