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The Galaxy Note8 Is No Threat to the Apple iPhone 8

By Ashraf Eassa – Aug 24, 2017 at 11:45AM

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This Fool doesn't think Apple has anything to fear from Samsung during this product cycle.

On Aug. 23, Samsung (NASDAQOTH: SSNLF) launched the Galaxy Note8, the successor to the ill-fated Galaxy Note7 that was discontinued and recalled because the batteries inside the devices kept exploding.

The device, based on the announcements, is a straightforward improvement to the Galaxy S8+ smartphone that launched earlier this year; it has a slightly bigger screen, a dual-camera setup, an S-Pen stylus, and 50% more RAM.

Apple's iPad and iPhone side-by-side.

Image source: Apple.

The phone is also expected to sell for about $930, according to The Verge.

Interestingly, analyst Mark Moskowitz (via Barron's) said the Note8 "represents the return of staunch competition into the premium segment ($700+ ASP) of the smartphone market following Samsung's Note 7 debacle last year," which could negatively affect the performance of Apple's (AAPL 2.44%) iPhone business during this coming product cycle.

Give me a break.

How much does the Galaxy S8 cost?

In April of this year year, Samsung launched its Galaxy S8-series of smartphones, which consisted of two models: Galaxy S8 and a larger version called the Galaxy S8+.

At launch, the Galaxy S8 sold for about $720, while the Galaxy S8+ went for around $850.

I'd love for Moskowitz to explain to me how the introduction of the relatively niche Galaxy Note8 -- which, again, will retail for north of $900 -- suddenly represents "the return of staunch competition" to the $700+ smartphone market, when the $700+ Galaxy S8-series has been in the market for months.

What's even more interesting is that even though the Galaxy S8-series has a full-face display, making it look much slicker than Apple's current iPhone 7 and iPhone 7 Plus, the latter two phones still dramatically outsold their Galaxy S8 counterparts last quarter (the S8-series' launch quarter).

Note8 should be a non-factor for Apple

I would argue that the Galaxy Note8 is going to be pretty much a non-factor for Apple. If the iPhone 7 and iPhone 7 Plus sold well even against the Galaxy S8 and Galaxy S8+, then I'd expect this year's iPhone lineup to do very well against Samsung's offerings in the marketplace.

I think that Apple can bring enough features to the iPhone 7s and iPhone 7s+ to make them highly compelling alternatives to the Galaxy S8, S8+, and even Note8, and I suspect the OLED iPhone will be in a league of its own relative to anything Samsung (and probably any other smartphone vendor) will have in the market for a while.

If anything, I'd argue that Apple's competitive positioning in the premium smartphone market during this product cycle will be far better than it had been over the last several product cycles (even the vaunted iPhone 6-series "super cycle").

So relax, Apple investors -- Samsung just put out a nice phone with the Note8, but I don't think it'll dampen the enthusiasm for Apple's upcoming iPhone models (particularly the OLED iPhone).

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.

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