Is Samsung About to Get Samsunged?

Pop quiz. Name this company:

A vertically integrated South Korean conglomerate with an extensive supplier relationship with Apple (NASDAQ: AAPL  ) has ambitious hopes in the smartphone market. The company will aggressively imitate the products of rivals in the pursuit of success, and also further integrate additional key components, such as investing more heavily in its own mobile processors.

Time's up
Pencil's down. The correct answer? LG Electronics.

That's right; LG is in the process of doing to Samsung what Samsung did to Apple. LG has just unveiled a new "Value Pack" of software upgrades for its Optimus G Pro, and some of the features that the company is adding are straight out of Samsung's playbook.

LG's Smart Video pauses videos when the user looks away, an obvious carbon copy of Samsung's Smart Pause. There's also the Dual Camera feature, which simultaneously takes pictures using both sensors, and is exactly like Samsung's Dual Shot. This is all for a device that already looks identical to Samsung's Galaxy Note 2 (except without the stylus).

Galaxy Note 2 (left) vs. Optimus G Pro (right). Sources: Samsung and LG.

The Optimus G Pro was unveiled at Mobile World Congress in February, so it technically predates the Galaxy S4 that it also resembles. The 5.5-inch phablet isn't expected to launch in the U.S. until May, though, which comes after the Galaxy S4.

The bad news for Samsung is that there's little stopping LG from successfully using its own strategy against it. One of the benefits of enormous marketing budgets, however, is that Samsung has been able to build its Galaxy brand.

Another big marketing spender
While smaller rivals like HTC simply can't keep up with Samsung's marketing budget (even if HTC offers higher-quality products), larger competitors such as LG have more of a chance. Last year, LG spent $1.1 billion on advertising. When you add in other below-the-line marketing expenses like promotions ($652 million) and commissions ($1.6 billion), we're talking about more than $3.3 billion in marketing.

That's more than the $1 billion that Apple spent in fiscal 2012 (but less than Samsung) on advertising ,and Apple doesn't really use below-the-line marketing as much. The Mac maker doesn't typically offer very many promotions, and most of its sales are conducted through its online store or retail stores, where sales reps aren't compensated with commissions.

Android loyalty isn't Samsung loyalty
Android consumers have shown their fickleness before. It seems like just yesterday that HTC was the Android champion, but that was 2010. Even for users loyal to the platform, they're normally not loyal to the OEM brand. It's quite conceivable that another Android vendor could supplant Samsung in exactly the same way that Samsung displaced HTC.

Source: IDC.

Maybe it won't be LG; maybe it'll be Chinese vendors like ZTE or Huawei, both of which showed up on the global top-five radar last year. This may be more likely, since LG still doesn't rank in the top five, although it ranks No. 5 in the U.S. with 6.8% of domesticsmartphone subscribers.

The whole reason Samsung has been trying to undermine Google (NASDAQ: GOOGL  ) Android lately in the first place is in an effort to differentiate itself and fend off commoditization, which reduces the chances that fellow Android enlistees will steal its crown. If any vendor is going to topple Samsung, chances are it'll be another Android OEM. So long as it all contributes to Android ubiquity, don't expect much preference out of Big G as to who wins. In fact, the search giant already isn't particularly comfortable with Samsung's dominance anyway.

Is Samsung about to get Samsunged?

While Android OEMs face inevitable commoditization, Apple's highly integrated strategy lends to inherent differentiation and dramatically higher loyalty among users. The company's iOS platform lacks the fragmentation that plagues Android, which is how the iPhone and iPad businesses are able to generate healthy recurring revenue streams. Apple has plenty of other opportunities, which The Motley Fool details in our new premium Apple research service. Get started by clicking here.


Read/Post Comments (20) | Recommend This Article (15)

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 14, 2013, at 12:14 PM, Burstedbladder wrote:

    So they say Samsung stole the design of

    Apple's iPhone, and LG is stealing the same design from Samsung, So isn't LG pretty much stealing the iPhone's design as well?

    The way I see it. No company should be allowed to copy-write any phone design. No one complained about telephones of the past that looked the same. People were pretty much just happy having a phone in their home that worked.

    jussayin-

  • Report this Comment On April 14, 2013, at 3:24 PM, skyisfalling wrote:

    Your write up brings in lots of news in this sector, stealing "patents", etc. One thing though I would like to point out that your use of phrase, "that Apple lacks the ". You should have used a better verb than "lacks", it is not something that goes against Apple, this adds up to quality of Apple.

  • Report this Comment On April 14, 2013, at 3:43 PM, sisyphosii wrote:

    A good thing for all them companies that Alexander Graham Bell isn't around any longer after all they "use" one of his inventions called the telephone. The one thing most people don't seem to do anymore after gettin one of them "smart" phones.

  • Report this Comment On April 14, 2013, at 4:34 PM, Tellthetruth100 wrote:

    "Samsung ambitious hopes in the smartphone market."----- What a arrogant comment by an ignorant writer-- Samsung has been making a mobile phone for past 20 years long before Steve Jobs even dreamt of any thing like iPhone.

    Samsung was the one who introduced " Smartphone" even "MP3" long before Apple: GOOLE and See all "previous Samrtphones" made by Samsung !!

    Apple. Stealing everyone's ideas and making them their own then sue them,The True Marketeer and Backstabber.

    "Suing Someone You Stole the Design from To Begin With."

    See Samsung Prototype Smartphones before iPhone--

    Google► ""Samsung Reveals its Pre-iPhone Concepts:10 Touchscreen Devices"

  • Report this Comment On April 14, 2013, at 4:57 PM, Tellthetruth100 wrote:

    >>>The company will aggressively imitate the products of rivals in the pursuit of success,<<<---

    You dribble delusional nonsense again, It's been the other way around, Not only Steve Jobs stole the iPhone idea from Samsung F700 and Award win LG Prada, Apple has been shamelessly copying Samsung from a 'display size' to 'mimicking new technologies' and 'product cycles'. Apple has historically released only one new model per year and has changed the display size a total of once in its lifetime,

    Inept-APPLE is running out of breath to catching up with an innovative-Samsung since the iPhone HYPE dying down with it's hypster- Steve Jobs.

    Apple- Stealing everyone's ideas and making them their own then sue them,The True Marketeer and Backstabber.

    "Suing Someone You Stole the Design from To Begin With."

    See Samsung Prototype Smartphones before iPhone--

    Google► ""Samsung Reveals its Pre-iPhone Concepts:10 Touchscreen Devices"

    -------------

    Google► "Behold Samsung’s “iPad”– Made in 2006 ",,,,,5 years later, Steve Jobs came out with an iPad. iPad was a stolen design of Samsung's "Digital Photo Frame" that unveiled in 2006 at the LAS VEGAS Electronic show(CES)-

    The"Digital Photo Frame" was given to a guest attendant-Steve Job as a gift by Samsung VP then 5 years later,a backstabber Steve Job bite the hand that feeds him

  • Report this Comment On April 14, 2013, at 5:02 PM, Tellthetruth100 wrote:

    I'm wondering why US media are not reporting MORE Apple's setback News? Too embarrassed to shady-Apple caught on bullying Samsung

    and extorting the money on bogus, useless patents? LOL

    NEWS►USPTO Reaffirms Invalidation of Apple Patent in Samsung Suit---April 1, 2013.

    US Patent Office Issues a Final Office Action on Apple's "bounce-back" and 16 patents.

    The USPTO issued a First Office Action last October that tentatively rejected all claims of Apple's '381 patent after a federal jury had deemed that it was valid and that Samsung had infringed on it. As part of its re-examination of the patent, the USPTO issued a Final Office Action, While the initial ruling invalidated all 20 claims made in patent ‘381, The remaining 17 were once again rejected including the key ‘over scroll bounce’ claim---

  • Report this Comment On April 14, 2013, at 5:07 PM, Tellthetruth100 wrote:

    Anyone with brain knows Samsung makes far superior,innovative products than Apple, Galaxy products puts iPhone iPad half-arased product,

    Look at the revolutionary SCi-Fi features 'Air browsing"," Eye Track" technology on new GalaxyS4~~ Copycat Apple is running out of breath to barely catching up with Samsung by change their screens size to mimicking new technology and new product cycle!!

    Pathetic Apple shout one more time "DOA" at Samsung then only to copycat them month later.LMAO

  • Report this Comment On April 14, 2013, at 5:13 PM, Tellthetruth100 wrote:

    Fraudulent-Apple should STOP recycle someone else patents to sue Samsung. How embarrassing~ Finally out right defrauding and bullying tactic to extorting money from Samsung has been exposed

    'Innovation"my b-u-t-t !! fraudster-Apple.

    NEWS►USPTO Reaffirms Invalidation of Apple Patent in Samsung Suit---April 2/2013

    NEWS►German Federal Court Invalidates Apple Slide-to-unlock patent---April 4/2013

  • Report this Comment On April 14, 2013, at 5:33 PM, Tellthetruth100 wrote:

    >>>One of the benefits of enormous marketing budgets,<<<--

    Wasn't that reason Apple was able to brain washed uninformed ignorant consumers with these "mass HYPE marketing" and lies on blatant ripped off product like iPhone in the first place?

    Google and See how Steve Jobs stole the iPhone from world's first touch screen LG Prada Smartphone with exact same design and brain washed the world as he's product.

    "Creepy, iPhone is CLONE of award-winning LG Chocolate phone"

    Picture ►"iPhone & LG KE850: separated at birth?"

    Stupid LG, Apple had to shut LG's mouth from file the lawsuit by gave them a multiple year dispaly deals.

  • Report this Comment On April 14, 2013, at 6:15 PM, Tellthetruth100 wrote:

    Shady-Apple should STOP baseless lawsuits try to wring money out of Samsung on bogus, recycled patents that already Invalidated by USPTO.

    Recycling someone else patents to sue is outright disgusting and fraud.

    NEWS►USPTO Reaffirms Invalidation of Apple Patent in Samsung Suit---April 2/2013.

    NEWS►German Federal Court Invalidates Apple Slide-to-unlock patent---April 4/2013.

  • Report this Comment On April 14, 2013, at 9:15 PM, eldernorm wrote:

    Dear Tellthetruth100, Yes I just stole your ID and am emptying your bank account. You should not mind. After all, I will put the money to better use than you do. Right, its totally ok cause, well stealing is just stealing.

    Look at smart phones before the iPhone. Then look at them 9 months later. The look, the feel, the operation (OS) and samsung was the worst.

    Just a thought.

  • Report this Comment On April 14, 2013, at 9:18 PM, eldernorm wrote:

    To Tellthetruth 99.99,

    "Wasn't that reason Apple was able to brain washed uninformed ignorant consumers with these "mass HYPE marketing" and lies on blatant ripped off product like iPhone in the first place?"

    Well, I guess the huge amount samsung spent sure fooled you. Er, that is if you are not just trolling for them.

    As for the rest of your comment. It seems clear that you do not know the difference between 4 wheels and a chassis and a Lotus. All cars, trucks etc must be the same and the first chariot maker must be the only designer in the world. right. ???

  • Report this Comment On April 14, 2013, at 9:20 PM, eldernorm wrote:

    To.... er... troll or tool,

    "Anyone with brain knows Samsung makes far superior,innovative products than Apple, Galaxy products puts iPhone iPad half-arased product,"

    ifixit survey just completed and posted says that Apple iPhones are at least 3x more reliable than the plastic shiny things Samsung makes.

    Just the facts please. Shiny and huge is not innovation. Also, it helps if your features actually work and are not just for printing on the label.

  • Report this Comment On April 16, 2013, at 6:15 PM, eldetorre wrote:

    3X MORE RELIABLE? NO Aple fans are just more anal retentive about their stuff, which is why they buy apple products.

    All of the comments vis s vis apples ripping off samsung remain correct. Apple just polished existing technology. BFD

  • Report this Comment On April 16, 2013, at 7:51 PM, ayalara wrote:

    Ummm ... what's your point? LG and Samsung are joined at the hip like Kia and Hyundai.

  • Report this Comment On April 19, 2013, at 11:49 AM, libertysdead wrote:

    The funny part of all this is that the Apple Fanboys at Motley Fool are so distraught that their technology company of choice is getting crushed by innovation and superior products and they cant stand it. The Fanboys also cant stand the fact that Apple has exhausted it litigation options and that strategy blew up int its face as well. Apple is failing simply because it has become the company it was designed to kill

  • Report this Comment On April 19, 2013, at 11:58 AM, libertysdead wrote:

    Apple has succeeded in the past because they make products for people who are too lazy to really learn how to use a computer. Hence no customizations are allowed. No worry there most of the people I know that use apple products are terrified at the thought of changing the battery in their phone. No worry there either. So its an old peoples product look at who pimps apple products on the radio and TV old people who desparately want to be hip. This business model will ultimately fail because younger generation embraces technology that allows it to be customized and tweaked. Cant do that with Apple products. you will take what we give you and like it. This will die so deal with it Fanboys

  • Report this Comment On April 19, 2013, at 3:23 PM, jinyoo2004 wrote:

    You(Mr. Evan Niu)'ve written numerous articles about Samsung's devices and hardly recognized any good comments about them. Must own a lot of Apple's stocks and the HTC's.

  • Report this Comment On April 19, 2013, at 3:42 PM, WineHouse wrote:

    I was already getting fed up with MS Windows systems when the requisite patches that installed themselves on an almost daily basis while I waited for the machine to turn itself off just seemed to not only last forever but also actually messed up my Office programs. The last straw was when Microsoft announced that they would no longer support Windows XP. For my purposes, XP was quite adequate, thank you.

    So I explored the possibility of upgrading from my top-of-the-line Sony Vaio to a Mac. I was astonished at what OSX could do and what the hardware could do in conjunction with the software. So I bought a Mac. Yes, there was a learning curve as I slowly accustomed myself to the Mac way of thinking and doing, but it was worth the effort. I was astonished by the responsiveness of the machine. I got a MacBookPro with a totally phenomenal touchpad that could be set to be used however you wanted to use it. I originally thought I couldn't survive without a real Mouse, because I always hated the touchpads on the MS-dependent laptops I owned, but it was suggested to me by the salesperson that I should try the touchpad for a while before deciding whether or not I really needed a mouse. I decided I didn't. I was sufficiently impressed that I got myself a portable tablet-like device for travel purposes, to replace my little netbook (an Asus, slow as molasses like most netbooks) -- no, not an iPad, but an iPodTouch -- a little tiny thing, thinner and lighter than an iPhone, that does everything an iPhone5 can do except make or receive regular phone calls (or consume "data" -- much cheaper to own and operate). And the integration of the iOS with the OSX is amazing. Most people aren't even aware of the existence of this remarkable little gadget.

    When I read about Windows 8, I realized that they were trying to emulate the OSX operating system and the integration of OSX with iOS. No wonder so many folks hate Windows 8! For the same reasons that they hate Apple products. Except that the OSX is a well-established workhorse while Windows 8 is brand new.

  • Report this Comment On April 21, 2013, at 10:03 AM, LazyOldMan wrote:

    RE: Reliability

    OK so my son just inherited the iPhone 3GS, which is almost 5 years old and which runs the latest software IOS 6 and still works great. Try that with any Android device. My experience with my daughter's Android phones is they last about two years and be to be replaced.

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