The Samsung Galaxy S5 Is Under Assault -- Here’s Why It Won’t Matter

Packed with features, the Fire Phone takes a big swing at the Samsung Galaxy S5.

Jun 21, 2014 at 8:00AM

Galaxy S

The Samsung Galaxy S5 has a new challenger in Amazon's Fire Phone. Credits:, Samsung

Generally, there are two ways to pitch a new device. You can either tout an experience, or boast a list of interesting features and add-ons. (NASDAQ:AMZN) took the latter path in pitching the new Fire Phone, and it's aiming directly for the Samsung (NASDAQOTH:SSNLF) Galaxy S5.

On the surface, this looks like a no-contest. Fire Phone boasts a faster quad-core processor, plenty of RAM, a 13-megapixel camera and a high-definition 3-D display. All improvements over what the Samsung Galaxy S5 offers. And yet I don't see the Fire Phone crimping S5 sales anytime soon.

Carrying too much of the load
Not because the Fire Phone lacks panache or is too expensive. To the contrary, at $199 with a two-year contract the device is priced about in line with most other high-end smartphones. So what's the problem? Amazon's exclusive distribution deal with AT&T, which limits the potential customer base. So much for challenging the worldwide sales channel for the Samsung Galaxy S5.

In its press release, Amazon doesn't specify its reasons for choosing AT&T over others. Money surely had something to do with it. But the very fact that the e-tailer took this route means that the S5, available through all four major U.S. carriers and in 125 countries, isn't going to face much heat from the Fire. We can say the same for the iPhone, which launched similarly all the way back in 2007.

Global gains
What the touchscreen was to Apple's first iPhone, Firefly is to the Fire Phone. What's Firefly? A camera-powered shopping system that recognizes any product, instantly, in hopes that you'll buy more from Amazon. More than 35 million songs and 70 million other household items are catalogued in its database. Cool but not exactly awe-inspiring, especially when the handset looks, well, pretty much like every other handset out there. I doubt we'll see many switchers.

Maybe it won't matter. Maybe Amazon will be content to own a small slice of the smartphone market in the same way the Kindle Fire tablet accounts for a small portion of the tablet market. Maybe it's enough to have some devices that sell high-margin digital product from time to time.

Either way, Samsung can rest easy knowing that its worldwide distribution network will keep the Galaxy S5 perched near the top of the smartphone sales charts -- no matter what else Amazon does.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends and Apple. The Motley Fool owns shares of and 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.

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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