Will Samsung Eat Apple’s Lunch?

Samsung’s (SSNLF) new flagship phone—the Galaxy S7—has taken the market by storm. The Galaxy S7 reported strong growth and although easy comps from last year magnified its growth, the smartphone still performed terrifically in a flat smartphone market. The success of the smartphone is clearly evident in Samsung’s latest quarterly report.

In the most recent quarter, the company’s revenue surged 5.6 percent to 49.8 trillion Korean won and its operating profit escalated 12 percent to 6.68 trillion Korean won. This is all thanks to the company’s early release of its latest flagship Galaxy S7 smartphones.
Robust sales of Galaxy S7 smartphones allowed the company to turn Q2 into the most profitable quarter in the last 2 years.

Throughout the past few years, Samsung has performed well and achieved a lot of success in the smartphone market. This has been possible mainly because of the company’s Galaxy S series. The company started with Galaxy S and recently launched Galaxy S7/S7 Edge. Galaxy S7/S7 Edge has outperformed the smartphone market as it has become the best smartphone of the world available today.

At present, Samsung and Apple (AAPL) are the two major players in the smartphone industry. However, Samsung has taken a bite out of Apple’s pie by reporting double-digit growth in a flat smartphone market. Now, Samsung is on its way to launch its new Note 7 that can also prove to be a tough competitor for Apple’s upcoming iPhone 7.

Samsung skipped the sixth version of Note, and decided to produce the seventh version. Samsung’s Note 7 is something like the amicable twin of the formerly launched Galaxy S7 Edge, the smartphone that was exposed of one of the introductory quotes. As a matter of fact, Note 7 was reportedly built using the identical curved screen and Edge features that powers the Galaxy S7 Edge along with wider and larger screen.

However, the main difference is the Note 7’s S-Pen stylus, as it involves some few new tricks that were absent in Note 5. Most significantly, Note 7 comprises of a new Iris scanner that permits users to unlock their device completely hands-free.

Having already outfoxed Apple once this year, investors should expect Samsung to launch another stellar device. The company’s smartphone segment has helped it massively this year and I expect this trend to continue going forward. As a result, I think investors should buy the stock as it could offer more upside in the short-term.
Published on Aug 8, 2016
By Prudent Investor

Copyrighted 2020. Content published with author's permission.

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