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When Will Samsung Stop?

By Evan Niu, CFA - Apr 11, 2013 at 11:30PM

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Samsung's product experimentation reaches new heights with the Galaxy Mega. Will the South Korean company ever stop going bigger with its phones?

If you thought Samsung's recently unveiled Galaxy S4 was the company's next big thing, you'd be sorely mistaken. No, my Foolish friend, Samsung's next big thing is the Galaxy Mega, which was made official today. The good news is that Samsung ditched the horrible "Fonblet" name it was originally considering.

Galaxy Mega 6.3. Source: Samsung.

The Galaxy Mega will come in two different sizes: 5.8-inch and 6.3-inch. The 6.3-inch model is among Samsung's largest phablets to date, even though the international version of its Galaxy Note 8 has phone capabilities. The company briefly lost its status as the phablet king, with Huawei's launch of its 6.1-inch Ascend Mate. With the Galaxy Megas, Samsung can reclaim that title. At that larger size, the Galaxy Mega is nearly as large as Amazon.com's Kindle Fire or Google's Nexus 7, both of which are bona fide tablets. Will Samsung ever stop going bigger?

Samsung is showing that it has no intention of slowing the pace of its product experiments. At the same time, its willingness to release every imaginable form factor has played a large part in the company's rise to the top of the global smartphone market. Thanks to its operational efficiency, it can quickly launch products, and subsequently kill them quickly if they fail to take off. The ones that sell well stick, and because Samsung had no idea what the best form factor was, it figured it'd just try them all.

Nemesis Apple (AAPL 0.17%) is the exact opposite, sticking with exactly one display size for five generations, and only increasing modestly with the latest iPhone 5. However, competitive pressures are mounting, and investors have been calling for Apple to launch an even larger iPhone to defend against Samsung's assault. They may have to wait until next year, though, before Apple responds.

If anything, Samsung's success shows that both extremes of product depth and product breadth can work, with Apple representing the former, while Samsung embodies the latter. With Samsung currently riding high on its plethora of products, maybe it will never stop.

 

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