Samsung’s Galaxy S5 Is Nice, but No iPhone Killer

Samsung's Galaxy S5 is a great phone with top-shelf specs, but it's no iPhone-killer.

Feb 27, 2014 at 7:00PM

It's incredible just how wrong the batch of pre-release rumors about the Samsung (NASDAQOTH:SSNLF) Galaxy S5 were. There was no metal casing, no 2560x1440 screen, no Snapdragon 805/Exynos 6, no 64-bit, and no 5.24" display. That being said, while the S5 looks like a really nice device with top-shelf specifications/features, it doesn't really look like the iPhone-killer that many expected.

The phone is what?
The Galaxy S5 is a phenomenal and powerful device. The Qualcomm (NASDAQ:QCOM) Snapdragon 801 that powers it is incredibly zippy, right up there with the iPhone's A7 in both CPU and graphics-intensive tasks. The phone also sports the latest connectivity and cellular standards, allowing it to shine from a total device performance standpoint. Plus, it sports a fingerprint reader (although some reviewers feel that it's nowhere near as nice as the iPhone 5s' Touch ID).

As far as Android devices go, the Galaxy S5 really is the creme de la creme of phones. With top-notch specifications and features coupled with a large screen, this is a device that is sure to sell rather well, particularly if the success of the Galaxy Note III (which sold 10 million units in a mere two months) is any indication. However, while the device seemed to be hailed as an iPhone-killer, the truth is that it probably -- in stark contrast to this Fool's earlier thoughts -- won't drive a meaningful market share shift back to Samsung.

Why not?
The bottom line is that the Galaxy S5 is simply another Galaxy phone that follows the established, tried-and-true, and very profitable "Galaxy S" legacy. Relative to the S4, the specifications have been beefed up, it's slightly bigger, and it's available in a much more interesting color palette (you can now get them in roughly the same colors as the iPhone). However, the verdict is likely to be the following: anybody who would have bought a Samsung will probably buy the S5, and anybody who would have bought the iPhone will probably still buy the iPhone.

One more complication, though
The one complication, however, is the lot of equally impressive phones from the likes of Sony (NYSE:SNE) with its Xperia Z2. It won't be long before Lenovo (NASDAQOTH:LNVGY), HTC, LG, and others are out with compelling next-generation devices that, too, play the "spec wars" against the Samsung Galaxy S5. Of course, Samsung's brand is resilient and very well known, particularly in the US, but it's not hard to see these players eventually becoming more powerful over time (particularly as these are not small, unsuccessful companies trying to go up against Samsung).

Foolish bottom line
It really seems like the high end of the handset market, the Android market in particular, is starting to saturate as the phenomenon of "good enough" starts to kick in. Now, in the U.S., where carrier subsidies mask the rather high costs of these phones, the market for higher-end phones is likely to remain robust. But, in areas where the subsidies aren't so steep, all high-end devices -- especially Android ones -- will likely face material headwinds as mid-range and low-end phones start to offer phenomenal performance and features for very little upfront cost and no subsidy.

At any rate, the Galaxy S5 is here and it's as high end as smartphones get. Let's see how it sells.

You can profit from the smartphone wars
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Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of Qualcomm. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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