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Is Apple Forcing Samsung to Release the Galaxy S7 Early?

By Jamal Carnette, CFA - Jan 26, 2016 at 5:32PM

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According to an in-the-know source, Samsung is releasing the Galaxy S7 in March. Do Apple's plans have anything to do with that?

Apple's smaller iPhone 5s (pictured right) is rumored to get a makeover. Image Source: Flickr user Kārlis Dambrāns

It may not seem so, but Samsung (NASDAQOTH: SSNLF) is the world's largest smartphone vendor. Unlike high-end competitor Apple (AAPL 0.03%), Samsung releases a host of smartphone models at differing form factors and price points to broaden its client base. Apple may receive the most coverage, but Samsung moves the most smartphone units.

However, the smartphone industry is a tough business. Profitability is elusive for most models, except for the high-end units. For example, research firm Canaccord Genuity's last report on the subject found Apple took a massive 94% of smartphone industry profits with Samsung taking 11%. This combined figure is greater than 100%, because most other vendors lost money.

With that in mind, Samsung's high-end smartphone models, the Galaxy line, are of key interest when gauging the industry. According to a tweet from in-the-know smartphone watcher Evan Blass, it looks like the company is supposed to release its next Galaxy iteration on Friday, March 11, earlier in the year than the company generally releases its new Galaxy models. Could Apple have anything to do with Samsung's early release?

Why so early Samsung?
It's widely expected the firm will formally announce the release date during Mobile World Congress in Barcelona, as it has done so for the past few years. The conference takes place from Feb. 22-25, which, if the March 11 dates is right, would give Samsung more than two weeks to execute a wide-scale marketing rollout. The Galaxy S7's supposed release is earlier than in years past, as the firm generally releases the new Galaxy models in mid/late-April rather than mid-March.

For the current-gen Galaxy S6 and Galaxy S6 Edge, Samsung units were released on April 10. This was extremely close to its predecessor Galaxy S5's release date of April 11. The wildly popular Galaxy S4 went on sale even later, with a release date of April 24. If Blass is correct, the next Galaxy release could be a full month earlier than past releases. Why would Samsung deviate so much from its established release schedule?

Does this give further credence to Apple's 5se?
Perhaps Samsung was pushed into the earlier release rather than simply being ahead of schedule. According to 9to5Mac's Mark Gurman, Apple is looking to release an extended version of its 2013 flagship iPhone 5s with upgraded features. This is a way to continue to offer a 4-inch model, which would have traditionally been cycled out in the usual late-September release. But the biggest revelation in regards to Apple's rumored iPhone 5se model is the release date -- the company is rumored to unveil the new model during its March media event with a release date soon thereafter.

If so, it's possible that Samsung sped up its initial release time in order to pre-empt demand for Apple's extended iPhone 5se model. Apple's Tim Cook has been out front with his desire to grow market share from what he refers to as "Android Switchers." Last conference call, Cook pegged the Android switch rate at 30% of iPhone buyers.

Apple's iPhone 5se appears to be positioned as a lower-end unit than Samsung's newest offerings, as it will supposedly boast a 4-inch screen and the previous-gen A8 chip, and will presumably compete versus Samsung on price and on Apple brand cachet. Moving up the release date would presumably give Samsung first-mover marketing advantage versus Apple's new unit. That said, Apple hasn't announced the date of its March media event. It will be interesting to see what date Apple schedules the affair.

Jamal Carnette owns shares of Apple. The Motley Fool owns shares of and recommends 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.

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