Samsung’s Galaxy S5 Could Be a Game Changer

Samsung's (NASDAQOTH: SSNLF  ) rise as the world's largest smartphone vendor has been nothing less than impressive. The company has not only made a killing in the low end and mid range of the handset market, but it has built a strong enough brand at the high end with its Galaxy S series that it is a very legitimate threat to the mighty Apple (NASDAQ: AAPL  ) . While the Galaxy S4 did extremely well, sales of this phone disappointed the lofty expectations that the investor community had. That said, the Galaxy S5 can be a "game changer."

Samsung is fighting both Apple and secular trends
While Samsung's products are strong, and while its growth in the high-volume entry/mid-range of the market is robust, the company must fight two headwinds at the very high end of the market:

  1. The high end of the handset market has slowed considerably, much to the chagrin of both Samsung and its chief high-end rival, Apple.
  2. Apple seems to be strengthening its position at the high end.

The first point is one that nobody can really do anything about, and having a high market share position means growing that share is increasingly difficult. The second bullet point, however, is something Samsung can attempt to combat with next-generation, differentiated products.

Apple's iPhone 5s could become stale
While the iPhone 5s has been described by Apple as the most "forward-thinking" smartphone that the company has ever created, there is very real risk that it will become stale alongside phones that are coming at Mobile World Congress 2014. More importantly, though, is that Samsung's Galaxy S5 is likely to prove to be a rather nice phone with great hardware and software, as the company continues to refine its approach.

The Galaxy S5 is likely to sport a Qualcomm Snapdragon 800 in the U.S. and other developed markets (and an "Exynos Infinity" for international versions), 3GB of RAM, a 2560x1440 display, an updated/new industrial design, and a fingerprint reader. This should make it the crème de la crème of Android devices, and to address the critics that Samsung's products are "cheap plastic," there will likely be a version with a metal chassis. The iPhone 5s is likely to pale, at least from a hardware perspective, in comparison.

It's not all about the hardware
There's no doubt that the S5 will likely to be more feature-packed and have a more aesthetically pleasing design than the iPhone 5s, but this really isn't enough. Many Apple buyers became customers not only for the hardware, but for the software ecosystem, the smooth uncluttered user interface, and the excellent support that Apple provides. Also, it's tough to deny the cachet that the Apple brand has among the more affluent of the smartphone-buying population.

It will be interesting to see how Apple's market-share numbers end up following the Galaxy S5 launch. If the Galaxy S5 is as impressive as the leaks and the pre-release marketing hype suggest, then Apple's market share could take a meaningful hit until the company launches its next-generation iPhone 6, which should contain meaningful hardware and software improvements that can turn the tide back in Apple's favor.

Foolish bottom line
The upcoming Samsung Galaxy S5 is likely to be a great device, the most premium of the Android devices. Apple is probably going to lose high-end share as this product ramps, but if Apple is smart, it will prepare to host a "special event" to launch a suite of new iPhone products sooner rather than later. 

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Read/Post Comments (17) | 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 February 24, 2014, at 10:02 PM, JHawkinTexas wrote:

    LMAO! Yeah right. Gamechanger? Can't wait to try out that new 64 bit processor on the S5. Oh wait, it's not 64 bit! What happened to Samesung's promised response to Apple's 64 bit iOS and ARM processor? Nadda, that's what happened. Can't wait to try their fingerprint sensor. Now that's real innovation. Oh wait, Appls 5S has had it for 7 months by the time the S5 is released.

    LOL!

  • Report this Comment On February 25, 2014, at 1:14 AM, JokerJoey wrote:

    If you really look at the 5 look at the S5, all it has is a slightly larger screen and a problematic copycat of the fingerprint system that Apple introduced (you have to orient your finger specifically or it doesn't work every time). Couple that with the fact that Samsung said it wouldn't be available for several months and the announcement seems to be trying to mimic the original unveiling of the original iPhone. The difference is that this is a big yawn.

    And yes, Apple WILL have something to announce that will permanently shift the foci away from Samsung. Remember Tim's tweet this morning. Something about taking time to get it right as I recall. Investors will be well rewarded, I assure you.

  • Report this Comment On February 25, 2014, at 1:15 AM, JokerJoey wrote:

    Oops...that's "focus", not "foci".

  • Report this Comment On February 25, 2014, at 8:45 AM, Mathman6577 wrote:

    Doesn't seem to be a big gamechanger .. appears to be just a rehash of the S4 with a slightly better camera and a slightly larger display (which may be the best upgrade of all). Throw in a dust/water proof case (maybe a good thing) and a maybe a little bit of a processing system improvement and maybe you have a slightly better phone.

  • Report this Comment On February 25, 2014, at 11:33 AM, Cintos wrote:

    Unfortunate that a "review" such as this is posted on the S5 release date, but does not represent the product Samsung released.

    And talk about slavish copying.. S5 vs 5S?

  • Report this Comment On February 25, 2014, at 9:37 PM, suntannedmonk wrote:
  • Report this Comment On February 26, 2014, at 4:42 AM, Burnedbrownie wrote:

    But...but... none of this happened!

    The phone looks the same or even worse than before.

    The screen is bigger thus has a lower ppi.

    It's larger and heavier.

    The fingerprint sensor is a swipe sensor that only works with a careful swipe, not from any orientation, while the iPhone uses a touch sensor.

    And the 800 (or 801) is actually slower than the A7 which came out six months ago.

    Super fail.

  • Report this Comment On February 26, 2014, at 7:33 AM, scottsta wrote:

    I love the Motley Fool but this is a bad and inaccurate article. It should be taken down.

  • Report this Comment On February 26, 2014, at 10:24 AM, marv08 wrote:

    Quote seriously, while Samsung did at least attack the respective concurring iPhones from a spec sheet viewpoint (not in user experience though, as Android can't even get there)... This might be the first time they are years behind even from that angle.

    CPU/GPU fail. New instruction set fail. Fingerprint scanner fail. Still poor odd-colored AMOLED fail. Design puke inducing. Worst Galaxy yet.

  • Report this Comment On February 26, 2014, at 10:42 AM, griffd wrote:

    Well, you guys just lost all credibility with me with this one article. You should be ashamed (and you should know better - this is Samsung we are talking about here!)

  • Report this Comment On February 26, 2014, at 11:55 AM, zenfoto wrote:

    This type of rumor-based speculation article with no actual useful investment advice and, proven wrong by the actual facts, is sadly detrimental to the Motley Fool service.

    In financial investing, you should write what you know, have researched, and can prove, then draw well reasoned conclusions from that data.

    Otherwise it's just fiction. In this case, bad fiction.

  • Report this Comment On February 26, 2014, at 4:31 PM, TheeMadCatte wrote:

    I question the credibility of fool.com as a whole for releasing an article this speculative and frankly, bad.

  • Report this Comment On February 26, 2014, at 8:26 PM, pablo007 wrote:

    I think they let anyone post right? Because it doesn't look like this person knows what he's talking about.

  • Report this Comment On April 06, 2014, at 3:52 AM, techgalore wrote:

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