Apple Gets Shamelessly Copied, Again

It's clear that the high-end smartphone market continues to look to Apple for "inspiration."

Mar 29, 2014 at 11:00AM

It's pretty incredible that Apple (NASDAQ:AAPL) is sometimes accused of not being innovative. This is the company that brought us the smartphone as we know it today, and the execution across every part of its product portfolio -- Mac, iPhone, or iPad -- has been nothing less than stunning. Apple's execution is so good that the company has, once again, been shamelessly copied by Samsung (NASDAQOTH:SSNLF) and HTC in their most recent flagship phones.

Gold, silver, and space gray ... how original!
Apple launched its iPhone 5s lineup last September with devices that looked like this:

Shameless Small

Source: Apple.

Great colors, right? You've got the silver, gold, and space gray. Now look at the most recently released HTC One and Samsung Galaxy S5 lineups, respectively:

Pr

Source: HTC.

Scamsung

Source: Samsung.

Could it get any more obvious that both Samsung and HTC are pretty shamelessly playing "follow the leader"? Sure, one could conceivably say that these are just colors. While this is true, the fact that Apple's competitors are using nearly identical color schemes to what Apple offers is no coincidence. In fact, if this idea were so "obvious," then why didn't HTC or Samsung think to offer this particular set of colors beforehand?

Here lies the investment risk for Apple
Apple is an innovator and a company that understands its customers. It has world-class design teams (both industrial and semiconductor), and its software ecosystem and development efforts really are unmatched in the smartphone space. While that's all well and good, it's tough to ignore the fact that (almost) anything that Apple can do (at least on the hardware side of things), others can and will copy.

The good news is that Apple is generally the innovator and that it has an extremely powerful brand that provides protection. For example, in the notebook space there are plenty of MacBook Air/Pro copycats, but the Mac has gained market share during 30 of the last 31 quarters. This isn't a coincidence -- it's a result of strong execution on Apple's part, even as some notebook vendors offer more "whiz-bang" features at lower price points, and a strong brand. But this success doesn't come easy.

The iPhone 6 will be critical
Apple has produced a certifiable winner with each and every iPhone. But as the competition heats up, it will need to deliver something outstanding with the iPhone 6. There's little doubt that as far as the silicon goes, it's going to be fantastic (look at the A7 chip), and iOS 8 should be even better than the already wildly popular iOS 7. However, strong execution on an improved industrial design -- Apple's forte -- will be crucial.

Foolish bottom line
Apple's mission is simple: grow iPhone sales, and take as much of the high-end, high-value "hero device" market as possible. The iPhone 5s was a great device that managed to stop the Galaxy S4 dead in its tracks, but the iPhone 6 will need to halt and reverse the progress that Samsung has made with the Galaxy S and Note lines combined. It can probably be done with just the addition of new screen sizes, but a dramatically improved industrial design also couldn't hurt.

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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.

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