This iPhone Wannabe Might Score for Google

I'm picky about my cell phone. The Apple (Nasdaq: AAPL  ) iPhone ain't good enough for me. The BlackBerry series from Research In Motion (Nasdaq: RIMM  ) doesn't make sense to a freelancer like myself. The phone I want doesn't even exist here in the U.S. yet.

What's the big deal?
I'm talking about the Samsung i7500, a.k.a. "Galaxy," smartphone. When the gadget lands on our shores, I don't really care which of the Big Four mobile phone service carriers gets it first. If my current service provider, Deutsche Telekom's (NYSE: DT  ) T-Mobile, snags it first, I'll stay with them. But if Sprint Nextel (NYSE: S  ) steps up first, that's where I'm going.

I'm excited about the Galaxy for a number of reasons:

  • The OLED screen, likely powered by technology from longtime Rule Breaker Universal Display (Nasdaq: PANL  ) , is gentle on battery drain yet draws rave reviews for its brilliant picture quality.
  • The 5-megapixel camera comes with a high-efficiency LED flash and computerized autofocus. Coupled with 8 gigabytes of storage space in the phone, the Galaxy beats the pants off my Sony (NYSE: SNE  ) digital camera. The Galaxy could store every picture I've taken with the Sony over the past six years -- without adding memory cards.
  • And of course, this phone runs the Android operating system with direct hooks into a plethora of services from Google (Nasdaq: GOOG  ) . It's not the first Android phone on the market, but it's the first time I've seen this exciting platform married to a high-powered hardware package.
  • Oh, and there's no need to hide in shame from your iPhone-toting friends, because this bad boy even comes with Hollywood good looks.

Investing takeaway
The Galaxy is one of the first truly impressive Android phones, alongside the HTC Magic. Hands-on reviews place these Android handsets in the same rarefied air as the iPhone, which was not the case with early models like the T-Mobile G1. When these phones wash up on American shores in the next few months, I expect them to sell like ice cream on Miami's South Beach.

Google has another winner on its hands here. Android phones like these could become the gold standard of mobile connectivity -- or simply push incumbents like Apple and Research In Motion to do better. Either way, Google wins thanks to its dominating stature in monetization of online traffic.

The phone also presents an opportunity that Samsung desperately needs. While the company quietly controls a hefty 19% of worldwide mobile phone market share, its smartphone market share is below 3%. As Apple and Research In Motion have shown the world, the real way to score outsized profits in the mobile industry is to create a differentiated smartphone that can attract sizeable profit margins. Luckily, the Android presents an opportunity to marry impressive hardware with the compelling software that Samsung has lacked in the past; it's the company's most compelling product to date and should be a good test of whether Android will catch on with consumers.

However, that's just my 2 cents on the phone. Will anyone else be following in my footsteps and buying the new i7500? Is the phone a legitimate threat to Apple and Research In Motion's stranglehold on the U.S. smartphone market? Let me know in the comments section below.

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Google and Universal Display are Motley Fool Rule Breakers recommendations. Apple is a Stock Advisor pick and Sprint Nextel is an Inside Value pick. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google and Universal Display, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (14) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 17, 2009, at 1:46 PM, bsimpsen wrote:

    Compare photos taken with the phone and your Sony camera before declaring a winner. The tiny lens of the camera phone is the weak link. At least 2-3 of the five megapixels in the phone camera will go wasted.

    I don't deny the convenience of a camera in the phone, but to suggest it's a good camera is a stretch.

  • Report this Comment On August 17, 2009, at 2:35 PM, plange01 wrote:

    google was just to late and its phone is not that good a huge failure for google who is getting desperate to maintain its level...........

  • Report this Comment On August 17, 2009, at 2:58 PM, lkmd98 wrote:

    I am so happy for you. I cant wait till you get your new Samsung phone. Please dont be envious when everyone around you is texting, emailing, surfing, watching movies, seemlessly with their iphones. I think 90percent of my friends have iphones and only one thinks Blackberry is better. By definition:

    Blackberry= phone plus texting

    Iphone= mobile computer with the ability to make a voice call

    All others.....poor imitations at a lower cost

    lkmd

  • Report this Comment On August 17, 2009, at 3:45 PM, exapted wrote:

    I have been wanting this phone for a few weeks. The screen does look gorgeous in hands-on videos. The buttons look great. I like the way it would work for one-handed operation. I like the directional pad. I like the way it looks much better than the HTC phones. I'm sort of waiting it out right now, since I have a decent windows phone and would consider a UMTS based Motorola Sholes.

    According to one hands-on review video from Germany, you can purchase the Galaxy unlocked from O2 right now.

    If T-Mobile or AT&T get it, I might get it on contract in the US. But would you seriously get it from Sprint or Verizon? They use CDMA/EV-DO. I like to travel internationally, arrive at my destination, easily buy a prepaid GSM/HSDPA sim and get voice/data service immediately. And I would rather pay a lump sum than suffer getting jacked into a contract. But that's just me.

  • Report this Comment On August 17, 2009, at 4:09 PM, exapted wrote:

    @plange01

    Interesting that you think Google is too late and their phones not that good. I agree their phones are not that good. But I don't think iPhone is that good either.

    Android and iPhone have pretty enough interfaces.

    For power users:

    Neither have very good methods for task switching. In iPhone you can't actually switch tasks. You can get push notifications that launch apps, and you can listen to music while browsing. In Android you switch between any two apps by holding the home key, or pull down the notifications pane for updates in your background apps. I think the Palm Pre handles task switching (and perhaps notifications) much better at this point in time. But remember Google builds products incrementally. I don't think even the latest build of Android is aimed for heavy task switching. Battery life and user adoption are factors here.

    Google has a very solid strategy I think. They offer a free customizable OS for telecom companies to use as a basis for innovation. If enough manufacturers build Android devices, there will be many Android devices in all price ranges. That will really undercut Apple, Microsoft and RIM. And it will promote Google products. And I guess Google doesn't aim to profit through licensing or hardware.

    Just look at China Mobile's Ophone brand in mainland China, running their Open Mobile System, which is a customized version of Android. Here is a hands-on video of an Ophone by Lenovo (coming out soon I think): http://you.video.sina.com.cn/b/19793908-1572037875.html (worth watching!)

    There is one just released from Dell, I think Samsung (already out?), and another one coming from LG soon. They are only from China Mobile in mainland China.

    At the very least, Ophone will increase the critical mass of Android developers and applications, at least in the China market. The more phones Android gets on, the more likely Android is to be adopted in the future - and that is likely to help promote Google products.

  • Report this Comment On August 17, 2009, at 4:14 PM, PingPongHedge wrote:

    I would like to politely disagree with some of the iPhone fanboys here. Now I've worked in the wireless industry for years and I myself agree that the iPhone is a great phone. Awesome touch screen, great screen quality, media playback is great, but the main thing... is GREAT MARKETING. I think that part itself is key.

    "I think 90percent of my friends have iphones and only one thinks Blackberry is better." - lkmd98

    In my experience from the thousands of phones I have sold, LOTS and LOTS of people buy something because it makes them look a certain status. How many of your 90% of friends also own MacBooks so they can check their e-mail at Starbucks with their fancy new computer? How many of them actually know that the iPhone just barely released a Push e-mail application for GMail and has a capacitative screen?

    "people find it utterly embarrassing to be seen wielding a caveman blackberry in a civilized world. iPhone, on the other hand, is a must for civilization...

    ...blackberries are so old, outdated, uncool and plain useless." -InfoThatHelp

    Oh yeah, I almost forget sometimes that as an American, I am supposed to put fashion over function... Sorry Blackberry for making extremely efficient phones that are practically mobile computers that can help you get your work done no matter where you are, you just aren't "cool" enough for me.

    "google was just to late and its phone is not that good a huge failure for google who is getting desperate to maintain its level..........." -plange01

    Have you ever owned an Android powered phone?

    Now out of the box the Android phones don't seem as fancy as the iPhones but once you take the few minutes to customize the phone for yourself, you will see what sets Google Phones from iPhones.

    Now in terms of the Galaxy, I'm really curious at how it will turn out. At the time being I just think it will be like an HTC Magic with a nicer screen and a little better camera.l At the top of my wait list right now is the HTC Hero that is powered by HTC's new Sense User Interface. HTC teamed with Adobe to bring Flash to their Sense UI. The iPhone doesn't have Flash yet much less MMS but that's ok, it will still make you look really good when you pull it out at Starbucks while you check your email on your Macbook.

  • Report this Comment On August 17, 2009, at 4:15 PM, exapted wrote:

    In case that Lenovo Ophone video doesn't load, here is the same video hosted in the US: http://www.viddler.com/explore/hwrms/videos/1/

  • Report this Comment On August 17, 2009, at 4:57 PM, exapted wrote:

    @InfoThatHelp

    I agree strongly that portability and homogeneity is important.

    But what you didn't explain is your assumption that Android doesn't enforce user interface standards. One of Android's claims to fame is the cross-platform application platform. Manufacturers can create Android phones with various different methods of activating each interface element. An Android phone could use a gesture, a button, or perhaps a voice command to go to the home screen. Android could run on various different processors and the cross platform application platform would perform as predicted.

    Iphone and Blackberry solve the cross platform issue by offering a limited number of devices, in a limited price range. That seems like a good strategy, especially in a very undeveloped market. But it could be very limiting when the smartphone market matures. And it is very immature now, because hardware is only just now barely allowing people to really get a full web experience on their phones.

    Windows Mobile 6 apps only really took off when HTC built a bunch of touch screen WM6 devices and offered a fairly consistent interface. When I run apps on my Motorola Q9h I often run into user-interface problems. And with Windows Mobile the apps are in binary format, portability depends on your chipset.

  • Report this Comment On August 17, 2009, at 5:04 PM, exapted wrote:

    @InfoThatHelp

    One of the major problems with Android, I think, is the lack of any binary format (for advanced games, for example). But we'll see pretty soon whether Google has a solution. Perhaps when Android starts coming out on faster processors - that's my guess.

  • Report this Comment On August 17, 2009, at 5:54 PM, exapted wrote:

    @InfoThatHelp

    Yes very interesting points. Actually I'm currently trying to figure out if China Mobile's Ophones would run regular Android apps. I should mention that I have an Android app in development so I'm kind of biased.

    Regarding binaries - I think Google *might* try offering some really good graphics, physics, and/or floating-point APIs in Dalvik (the VM) instead of binaries. Or they might try to develop an API that covers various elements for all of the available chipsets that Android runs on. I expect something the supports Google's goal of providing a customizable OS for manufacturers/telecoms to innovate on. But it is a very hard problem. I also know that many software developers feel constrained or disappointed by Google's APIs.

    And regarding the APIs, I don't think hardware manufacturers in the west will introduce competitive elements that interfere with the general functionality provided by the Dalvik virtual machine - that would simply be counter-productive. I'm still looking into China Mobile's Open Mobile System.

    But here are some important points, which don't negate your points in the least, but are still important I think:

    Maybe Android will excel in social networking and personal productivity applications. In this area graphics/binaries are not very important.

    Looking at the mobile phone market as a whole:

    Apple has around 1/3 of the profit in mobile phones worldwide I think. It seems that Apple's competitors need Android (and WM, and BB, and Palm) to compete. And Apple doesn't generally cover all price ranges. But they could, so we'll see.

  • Report this Comment On August 17, 2009, at 5:56 PM, exapted wrote:

    @InfoThatHelps

    Thanks for the CSP example. It drives home the point that non-cross-platform binaries are a Very big problem for Android. One they might not be able to adequately solve.

  • Report this Comment On August 17, 2009, at 9:03 PM, exapted wrote:

    @InfoThatHelp

    What I think might break Android apart is a specialized gaming interface, like a portable EEG unit or some very special graphics hardware. Maybe Sony would come out with a super Android gaming device - an Android phone will all the Android apps, plus it has some super gaming hardware. They wouldn't just donate it to the Open Handset Alliance obviously.

    But that's different from the programming languages and APIs for doing basic things like accessing Google Maps, displaying text input boxes, etc. The kind of applications I am interested in developing on Android are mostly server-side.

    Consider that most very simple Windows XP apps use .NET. That seems kind of similar to Android apps using the Android API.

    So Android is the platform, running on various hardware. Of course I realize machine instructions are different on different chipsets. Game development will continue to accelerate, and I think there are probably better and worse ways for the Open Handset Alliance to deal with the different chipsets. Maybe some companies will fizzle out because their chipsets are not widely supported.

    By the way I lived in China before. I worked in the software industry in both mainland China and Hong Kong. I occasionally dealt with Chinese telecom companies (and some of their closed policies). I once began developing an SMS-based mobile stock query system, only to discover that China Mobile had shut down their SMS gateway and API in compliance with a government order. And I found out that running an SMS gateway was illegal at that moment. I'm still not so sure Open Mobile System will be completely separate from Android. I guess they'll do whatever wins the most users and allows them to control revenue streams. I can imagine there being APIs related to language input/output, demographically targeted advertising APIs, etc. I will be asking the advice of some programmer friends in mainland China. You might be right anyway.

  • Report this Comment On August 17, 2009, at 9:11 PM, exapted wrote:

    @InfoThatHelp

    I had one Blackberry before. A couple of my friends love them. But I think the interface is just clunky. And maintaining a Blackberry server always seemed like a liability when you could just use Exchange. Their innovative days are over. They don't have much cash, well maybe that's a good thing. Apple has a mountain of cash from what I remember.

  • Report this Comment On August 19, 2009, at 8:37 PM, Vap1d wrote:

    @ the author

    I purchased the Galaxy from a seller on ebay in Germany last week who was willing to ship worldwide. I received the phone Monday. I also use T-Mobile here in the states. FYI the German/French version of this phone carries the AWS 1700Mhz band that T-Mobile uses for 3G. (The soon to be released UK version does not mention inclusion of this band in it's specs be careful there if you choose to import one)

    It is a great device, I had been using a G1 for about six months, and moving to the Galaxy has been a dream.. It doesn't feel like a brick in my pocket for one, the battery life (in my opinion and with my usage patterns anyway) has been better. Some people have claimed they experience poor performance here. But it is a computer in your pocket with an always on data connection with whatever myriad of apps you have installed running in the background frequently using that data connection.. The battery isn't going to last as long as your whatever brand whatever model dumbphone people, comon. The camera is an incredible leap over the G1 as well, not just the resolution but the flash makes it uhm dare I say usable in places other than outside in direct sunlight..

    Something else I'd like to mention, and this is just speculation so take it for what you will, but currently T-Mobile's android darling is the MyTouch 3G. It's been out for two weeks, I don't know that they will be willing to subsidize the Galaxy which has a number of better features than their current flagship android offering for quite some time. It just wouldn't make sense to push the MT3G as hard as they have what with media events in SF on launch day, the plethora of accessories they have available and untold numbers of stock of the device itself. I don't see it happening. Look for the Galaxy right before the holidays or more likely early next year.

    Oh one last thing- two versions of this device have passed FCC certification testing. The one out now in several parts of Europe (FCC ID: A3LGTI7500) sporting Quad-band GSM and Tri-band UMTS (900/1700/2100) Compatible with only T-Mo 3G here in the states. And more recently a version that has not as yet been released (FCC ID: A3LGTI7500L) Quad-band GSM and Dual-band UMTS (850/1900) The L at the end of that ID likely designates this version is headed to Latin America, more interestingly however is that the UMTS bands are what are in use by AT&T for 3G services.

    Cheers

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