It’s Too Early to Count Samsung Out

It ain't over 'till it's over, and Samsung's "weak" Q4 doesn't mean lights out for this South Korean giant.

Jan 27, 2014 at 11:45AM

There is very little doubt that Samsung (NASDAQOTH:SSNLF) 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 (NASDAQ:AAPL) 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.

Profit from the smartphone war
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers