If early indications are correct, Samsung (NASDAQOTH:SSNLF) appears to have another smartphone hit on its hands with its next-generation Galaxy S6 and Galaxy S6 Edge. After the groundbreaking success of its Galaxy S4, the company failed to capitalize on its positive momentum in the follow-up Galaxy S5 and has struggled operationally as a result.
For those following the company, the last two fiscal quarters have provided insight on the continued struggles of Samsung's mobile division. The company reported year-over-year operating profit declines of 60% in its fiscal third quarter and 27% in the recently reported fourth quarter. The company recently gave a profit guidance update for the current quarter that was 30% below last year's corresponding period.
Against that backdrop, Samsung has much riding on the Galaxy S6. And so far, it appears the company is rising to the occasion: After garnering mostly positive reviews of its iPhone-inspired design, early preorder reports indicate substantial demand for the device. South Korean site Naver reported the number of Galaxy S6 and S6 Edge preorders is more than double the total for the S5.
Meanwhile, a new report from Phone Arena (by way of CNET) suggests a third, unconfirmed version of the S6 could have an interesting differentiating feature against high-end competitor Apple: dual-SIM capability.
Dual SIM: It's two phones in one
A SIM, or subscriber identity module, card enables your smartphone to connect to your mobile provider. Essentially it's your phone's fingerprint to the network carrier. In essence, two SIMs allow you to have two working phones in one unit. This is convenient if you often travel between countries, as you could get both a foreign and domestic SIM card and not have to lug around two phones or pay hefty roaming and/or international fees.
But the biggest domestic market for a dual-SIM phone is the enterprise set and the bring your own device, or BYOD, phone crowd. As the lines between worktime and playtime become increasingly blurred, demand for a dual-SIM device should increase. A dual-SIM phone is essentially an extension of single-device access for both work email and personal email; although both are walled off, they are accessed from one device. No more work phone versus personal phone issues -- calls, texts, and emails are delivered to a single point of access.
Perhaps a niche product, but a growing niche
Allied Market Research this week forecast that the BYOD market would grow at a compound annual rate of 36.3% from 2014-2020, with smartphones taking the lion's share of this market. Apple has recently dominated this space and reported an enterprise activation market share of 73% in the fourth calendar of 2014 (per Good Technology's Mobility Index Report) as its successful iPhone 6 and iPhone 6 Plus made their way to business users through a combination of BYOD and company-bought phones.
For Samsung, which has previously taken a "see what sticks" approach with phone design, this appears to be a low-risk way of adding value for the enterprise set. Although I personally see value in the upgrade, and a dual-SIM device could eventually become the smartphone standard, it's not yet a game changer. Meanwhile, the single-SIM Galaxy S6 and Galaxy S6 Edge went on sale April 10; that's what Samsung fans and investors should focus on for the time being.
Jamal Carnette owns shares of Apple. 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.