Samsung (NASDAQOTH: SSNLF) announced its newest flagship phones, the Galaxy Note 4 and  Galaxy Note 4 Edge, at IFA 2014, the largest tech expo in Europe.

Samsung Galaxy Note 4 and Note 4 Edge Source:

With Samsung recently reporting "weak demand" for its phones in the face of stronger competition in the low-medium end of the market and Apple (NASDAQ: AAPL) announcing 4 million iPhone 6 pre-orders in the first 24 hours, (double that of the iPhone 5) Samsung needs something special to help it differentiate itself on the high end of the market.

Luckily for Samsung investors, the company is a pioneer in research into one of the most important material science breakthroughs of the coming century -- one that could help it jump generations ahead of Apple and every other smartphone maker in the world. 

Graphene: Samsung's ace in the hole
Graphene is a recently discovered nano material that's a thin -- just one-atom thick -- sheet of carbon. Though originally discovered in graphite (found in pencil lead), graphene has amazing physical properties that give it incredible applications in almost every field of electronics.

For example, graphene is the strongest known material in the world, 100 times stronger than diamond, yet completely flexible and possessing incredible optical and electric properties that promise to revolutionize the telecommunications, electronics, and computer industries.

So how could Samsung crush Apple and own the future of smartphones (among many other industries)? The answer lies with its world-leading number of graphene patent applications. 

Samsung: World leader in graphene patent applications

Company Number of Graphene Patent Family Applications Worldwide
Samsung 210
IBM 64
SanDisk 36
Foxxconn Electronics 35
Apple 2

Source: U.K. Intellectual Property Office. 

As seen in the above table, Samsung is far ahead of any other company when it comes to graphene patent family applications. In fact, it has more than three times as many as IBM (NYSE:IBM), which is looking into graphene as part of a $3 billion, five-year research effort to build sub 7 nanometer computer chips. It has 105 times as many patents as Apple, which doesn't even make the top 20 when it comes to graphene patents.

One of the main reasons that Samsung has such a lead on Apple is its location. Headquartered in Korea, one of the leading global hubs of graphene research, it has close ties with Sungkyunkwan University, the second leading patent holder in the world. In fact of the top 20 graphene patent holders in the world, four of them are Korean research universities (16 are companies or universities located in Asia).

Samsung's goal: Tech that's decades ahead of Apple 
Whereas most companies, such as IBM and SanDisk (NASDAQ: SNDK) are only interested in one area of graphene applications (such as computer processors or memory, respectively) Samsung's interests are far wider.

Samsung is investigating graphene's applications in every facet of smartphone technology. From computer chips that are 10,000 times faster, to supercapacitors that could replace batteries and charge in just five seconds, to unbreakable flexible phones as thin as a piece of paper, Samsung wants to not only dominate smartphone graphene technology -- it wants to own the entire global graphene industry.

Graphene: a potential multi-billion dollar market
This is because whoever discovers how to mass produce graphene most efficiently (and cheaply) will be able to dominate the $2 trillion global electronics market, an industry that will underpin nearly every major industry in the world over the next century. Everything from telecommunications, to computers, to medical imaging, diagnostics, drug delivery, environmental clean-up, energy storage, alternative energy, and the Internet of things -- all could be massively influenced by graphene technology in the decades to come.  

Does any of it matter? 
Two things could stand in the way of Samsung's domination of Apple and its other competitors. First, is the fact that graphene was discovered just a decade ago and the technology is still in its infancy. This means that none of the amazing applications mentioned above are likely to appear in the next few years. 

Second, is the fact that Samsung has almost always had a technological edge over Apple, yet to consumers this doesn't seem to matter. For example, the Note 4, on a pure "specs" basis is far superior to the iPhone 6 Plus. 

  Samsung Galaxy Note 4 Apple iPhone 6 Plus
Processor 2.7 GHz, quadcore 1.4 GHz duel core
Camera 16 MP back, 3.7 MP front 8 MP back, 1.2 MP front
Screen 5.7 inch 2560x1440 5.5 inch 1920x1080
Memory 32 GB +128 GB expandable up to 128 GB, non expandable


Yet Apple abandoned the specs war years ago, choosing to focus on achieving a great overall consumer experience. Take its camera for instance, long considered one of the best overall smartphone camera, despite having "only" a 8 MP sensor. 

The fact that the iPhone 5s and 5c were the top two selling smartphone models in the world for the last six monthsproves that consumers care more about a phone's day to day usefulness than in having the latest, greatest, and fastest hardware. 

Which is the main problem for Samsung. Even if it can engineer graphene chips that are 10, 100 or even 1,000 faster than today's technology, none of it may matter if all consumers want to do is browse the web or use apps designed around much slower but "fast enough" phones. Samsung will have to offer consumers some additional reason to choose their phones over Apple's. Such applications might include a completely foldable phone (with a 7 inch screen that weighs less than an iPhone 5s and takes up less room), or one with

Samsung Galaxy Round Source: Samsung

 much longer battery life. However, so far Samsung's track record of innovation is less than stellar. For example, Samsung's Galaxy Round was the world's first curved phone but hindered by a high cost ($1,000) and limited utility from its curved screen.

The same may hold true for Samsung's graphene phone breakthroughs. They may end up costing too much and not offering consumers enough added utility to be worth the added price.  

Ironically enough, if Samsung's hardware greatest value in its graphene patents may be in licensing or building components for its competitors. For example, Samsung provided the original A7 chips used in the iPhone 5s.

Foolish takeaway
Samsung's lead in graphene patents is vast, and its likely that the company's R&D lead in this important industry will give it the raw potential to dominate the global electronics industry. However, to maximize that potential will require Samsung innovating on more than just hardware, but the overall consumer experience. Until Samsung can prove it can do that, potential investors may want to hold off buying its shares.