How Samsung Plans to Respond to Apple’s iPhone 6

Samsung is likely to respond to Apple's iPhone 6 with two new handsets.

Aug 6, 2014 at 6:30PM

Apple (NASDAQ:AAPL) will unveil its next flagship smartphone on September 9, according to several major media outlets. The device, which could come in two varieties, is expected to feature a larger screen.

That makes it a major competitive threat to Samsung's (NASDAQOTH:SSNLF) high-end Galaxy handsets. Although Samsung's customers may have been motivated by a variety of different factors, Samsung's larger screens have long stood out as a major point of differentiation (the threat posed by a larger iPhone has certainly not been lost on Samsung's marketing department).

Ahead of Apple's iPhone announcement, Samsung is preparing to respond to the iPhone 6's debut with two new phones of its own.

Samsung's next phablet
Samsung will start with what could be called the Galaxy Note 4. The phablet, which will follow last year's Galaxy Note III, is likely to be unveiled at an event on September 3 -- literally days before the iPhone 6's announcement.

Although Samsung has not officially confirmed the Galaxy Note 4's existence, the company said during its recent earnings call that another large-screen handset would be forthcoming. On Tuesday, Samsung sent out press invites to a September 3 event. Those invites urge would-be attendees to "note" the date, and feature artwork resembling Samsung's Note-exclusive stylus software.

Assuming the Note 4 isn't a dramatic departure from Samsung's prior models, it will be defined by stylus software and by its oversized display. In addition to internal improvements, it could feature some of the enhancements Samsung brought to its Galaxy S5, including a fingerprint scanner and water resistance.

The Galaxy Note III sports a 5.7-inch display, an increase from the Note II's 5.5-inch screen. Even if Samsung ships a Note 4 no bigger than its predecessor, it could still be more than an inch larger than Apple's iPhone 6, which is rumored to have a 4.7-inch display. Apple is also widely believed to be working on a second, 5.5-inch iPhone, though reports of its existence and availability have been conflicting.

Samsung's Notes have attracted a progressively larger audience in recent years, with the Note III selling 10 million units just two months after its debut (twice as fast as the Note II). Those who want Samsung's next Note will probably find a 4.7-inch iPhone too small for their liking -- a 5.5-inch model (assuming it's released), however, could prove to be intense competition.

A flagship with premium materials
Details surrounding Samsung's second phone are far more scant, with no press event and no firm release date. Nevertheless, another Galaxy seems likely, with Samsung's management promising to release a new, attractive phone that would offer different materials -- perhaps an aluminum body, a replacement for Samsung's oft derided bendable plastic frames.

Despite widespread criticism from major tech reviewers, Samsung has stood by its design, and has continued to offer plastic Galaxy handsets year after year. But in May, Samsung's head of mobile design, Dong-hoon Chang, resigned, just weeks after the debut of the plastic-backed Galaxy S5.

Apple has been using a combination of glass and metal for its iPhones since the debut of the iPhone 4 in 2010. (The iPhone 5c was a notable exception, but escaped criticism with its unibody design and hard plastic shell.) Finally following Apple's lead could help Samsung deflect its most common complaints, but might not be enough to spur sales -- rival HTC, despite offering an attractive, metal-backed flagship phone, has seen steadily declining revenue.

Can Apple poach Samsung's best customers?
Apple's iPhone 6 could shatter records when it goes on sale later this year. According to The Wall Street Journal, Apple has ordered enough components to assemble 70 million-80 million new iPhones by the end of the year.

Many of those customers will likely be existing iPhone users, but some could be current owners of Samsung's high-end Galaxies. With its revenue, profits, and market share in decline, Samsung will need to deliver a pair of impressive handsets to beat back the iPhone 6.

Sam Mattera 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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