Samsung Doesn't Make the Best Android Phone Anymore

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Among Google's (NASDAQ: GOOGL  ) many hardware partners, no company ships as many handsets as Samsung (NASDAQOTH: SSNLF  ) -- the Korean tech giant completely dominates the market for Android phones, selling far more handsets than any of its rivals.

But at least at the high end, Samsung is about to face some tough competition -- both Sony's (NYSE: SNE  ) Xperia Z2 and HTC's One M8 are arguably better phones than Samsung's upcoming flagship.

Xperia Z2 vs HTC One M8 vs Galaxy S5
While the first Android-powered phone debuted in 2008, it wasn't until 2010 that Google's mobile operating system began to take off. That year (not so coincidently) Samsung unveiled the original Galaxy S, a phone that's since become the premiere Android handset (Microsoft, for example, simply refers to all high-end Android phones as "Galaxies").

But Samsung may have finally met its match. At least on paper, both the HTC One M8 and Sony's Xperia Z2 are every bit as good as Samsung's flagship, with large, 1080p screens, big batteries and zippy processors. Samsung's S5 is water-resistant, but not as resistant as Sony's Xperia Z2. The HTC One M8, meanwhile, has front-facing speakers and a far more attractive body than Samsung's Galaxy S5.

Of course, there are still reasons to prefer Samsung's flagship over HTC and Sony's -- Samsung's phone is the only one with a built-in heart rate monitor for example, or a removable battery. Those features could attract some buyers, but for the most part, they seem largely superfluous. Early reviewers have already labeled HTC's One M8 as the best Android phone of 2014, and Sony's flagship has received a similar level of praise.

Sony bets on mobile
That's great for Sony, as the Japanese electronics giant increasingly emphasizes its mobile electronics businesses. Earlier this year, Sony sold off its struggling PC unit and put its money-losing TV segment into a separate subsidiary. Sony's management has set ambitious targets for its Xperia line, and it now expects to ship 40 million smartphones in fiscal year 2013.

That won't come close to the 320 million handsets Samsung shipped in 2013, but unlike Samsung, Sony doesn't compete at the low end. It offers a few different versions of the Xperia Z, but nothing like the sub-$100 smartphones Samsung peddles in emerging markets.

Samsung's advantages
The Xperia Z2 could help Sony capture some of Samsung's high-end customers, but Sony has its work cut out for it. In addition to an established brand that's arguably more well-known than Android itself, Samsung has an extensive network of mini-shops within larger Best Buy stores -- Sony has its own retail operation, but it plans to close two-thirds of its existing stores.

Samsung's original Galaxy Gear smartwatch wasn't particularly well-received, but anyone who wants one (or already owns one) has no choice but to go with a Samsung-made phone. The same is true for the Gear 2, Gear 2 Neo, and Gear Fit. Sony has its own rival smartwatch, but it works with nearly any handset running Google's Android.

More competition is great for Google
This increased competition is great for Google, as it ensures that no company -- particularly Samsung -- can exert too much control over its mobile operating system. Last year, The Wall Street Journal reported that Google had become uneasy with Samsung's dominance, fearing it could exert a degree of control over its operating system.

While it seems unlikely that Sony or HTC will unseat Samsung, the Korean handset maker is no longer offering products that are head and shoulders above the competition. Samsung still has its advantages, but the competition has intensified significantly.

Samsung and Sony may have struck first, but Apple could be about to blow them away
Samsung and Sony have both released wearable devices, but neither has found much mainstream success. But just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

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Comments from our Foolish Readers

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  • Report this Comment On April 03, 2014, at 5:31 AM, st0815 wrote:

    Actually despite having the same resolution - the S5 has a significantly better display than the competition. You might want to check out the displaymate review they got recently. They got particularly good marks in outdoor readability (brightest smartphone display) and color accuracy.

  • Report this Comment On April 04, 2014, at 11:04 AM, ectogamit wrote:

    Nothing can even compete with a Note series phone, absolutely nothing.

  • Report this Comment On April 04, 2014, at 11:44 AM, ewro wrote:

    I'd love to have one of the Sony phones, but I don't think they work with my carrier

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Sam Mattera

Sam has a love of all things finance. He writes about tech stocks and consumer goods.

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