Will Best Buy Get the Last Laugh on Apple?

Outside of Samsung itself, the biggest winner in the upcoming release of the revolutionary Galaxy S4 in the coming weeks may be Best Buy (NYSE: BBY  ) .

The struggling consumer-electronics chain will be housing Samsung Experience Shops inside its superstores, giving the South Korean consumer electronics giant a way to show off its latest phones, tablets, and laptops

AllThingsD's Ina Fried checked out one of the six test stores.

This isn't merely display space at a prominent location within the store. The 450-square feet "store within a store" is staffed by a dedicated Samsung consultant to oversee the operations.

As Samsung gets cooler -- and Apple (NASDAQ: AAPL  ) sheds some of its swagger -- Best Buy has positioned itself as a beneficiary.

BB&T Capital Markets analyst Anthony Chukumba made the argument in January, raising his rating and price target on Best Buy on the theory that folks will flock back to the superstore chain now that there's less reason to hit up a dedicated Apple store.

It makes sense in theory, especially now that Samsung has another hit on its hands. You obviously can't buy an S4 at Apple, and the coolness equation is pretty simple. Apple is way cooler than Best Buy, but Best Buy is also way cooler than the stand-alone wireless carrier stores.

The challenge, naturally, is if consumers still crave the in-store experience. Wireless carriers make it all too easy to order online and have smartphones shipped at the same in-store prices. However, waiting for the FedEx truck isn't always an option for impatient owners after a smartphone gets smashed to bits. There are also plenty of early adopters who enjoy the release date ritual of lining up with other early adopters.

It will be interesting to see how this plays out. Will Samsung promote these locations? Will they remain popular after the initial S4 buzz passes? Will customers balk after realizing that the S4 costs $50 more than the iPhone 5?

More importantly, will this be too successful? Apple and Mr. Softy have been able to open their stand-alone stores because of brand recognition; but isn't it a matter of time before Samsung follows suit? If enough shoppers are flocking to Best Buy for the sake of the Samsung mini-store, it won't be long before Samsung begins hitting up mall landlords to find selling space.

If Samsung times it just right, it can wait until J.C. Penney cans Ron Johnson, the guy who helped Apple introduce its still popular chain before flopping badly in his makeover at the department store chain.

This is about to get interesting.

The brick-and-mortar versus e-commerce battle wages on, with Best Buy caught in the middle. After what might have been its most tumultuous year in history, there are now even more unanswered questions about the future for the big-box electronics retailer. How will new leadership perform? Will old leadership take the company private? Will a smaller store format work out for both the company and its brave investors? Should you be one such brave investor? To help answer all these questions, The Motley Fool has released a new premium research report detailing the opportunities -- and the risks -- in store for Best Buy. Simply click here now to claim your comprehensive report today.


Read/Post Comments (6) | Recommend This Article (0)

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 April 04, 2013, at 7:30 PM, dogmatica wrote:

    Aloha,

    Nice article, but one question:

    "...especially now that Samsung has another hit on its hands." Isn't it a little early to know whether the S4 is a hit or not, or are there numbers available out there that I've missed? Just curious.

    Aloha!

  • Report this Comment On April 04, 2013, at 7:43 PM, bonzo99911 wrote:

    Lol I was about to comment on the same thing!

  • Report this Comment On April 04, 2013, at 8:16 PM, eidsonb wrote:

    And to call the S4 Revolutionary is a huge stretch....more of the same....if you want a truly innovative phone buy a Z10....

  • Report this Comment On April 05, 2013, at 8:04 AM, jdmeck wrote:

    Another idea Samsung stole from Apple.

  • Report this Comment On April 05, 2013, at 10:41 AM, mistacy wrote:

    aaple is $400B company, bby is an $8B... & Who is laughing? I am ...

  • Report this Comment On April 05, 2013, at 9:10 PM, MacZen wrote:

    What's with the title? I'm unaware that there is some type of spat between the two companies. Has there been some disrespect towards Best Buy by Apple? How about we dispense with the sensationalistic, meaningless headlines...

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2347456, ~/Articles/ArticleHandler.aspx, 10/26/2014 12:28:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement