Samsung’s (OTCMKTS:SSNLF) exploding Galaxy Note 7 is almost a distant memory. After the company finally revealed two different suppliers were the source of the problem, Samsung quietly moved on.
On March 29, the company announced the Galaxy S8 and S8+, a release that could prove problematic for Apple, Inc. (NASDAQ:AAPL). In the last quarter, Apple benefited from a lack of competition for its iPhone 7.
Apple iPhone 8 to Replace iPhone 7
In the second quarter, Apple reported revenue of $52.9 billion, plus slowing iPhone 7 and iPhone 7 Plus sales. In the quarters ahead, Samsung’s S8+ may eat further into Apple’s sales.
The Korean smartphone giant threw everything at the Note 7 successor. The MSM 8998 Octa Core processor that powers the Galaxy device is made by Qualcomm Incorporated (NASDAQ:QCOM). The screen is a massive 6.2 inches, compared to just 5.5 inches with the iPhone 7 Plus. It has 64 GB of standard storage, double that of Apple’s device.
Apple’s $1 billion lawsuit against Qualcomm may set the future iPhone 8 back. Qualcomm supplies a CPU that integrates with the 3G/4G/5G modem. Conversely, iPhone ARM processors are separate from the modem. Should it win or settle, Apple may cut its costs but the result may set the next iPhone at a technological disadvantage. SoC chips use less space and consume less power. These are two traits that the Galaxy may have over the next iPhone.
The timing of Apple’s iPhone 8 is especially important. It marks the 10th anniversary of the first iPhone release. Some sites speculate Apple will release the iPhone 8 in September 2017 or later. Alternatively, the company may release the 7S and 7S Plus first, then launch a curved, all-screen iPhone later.
Samsung on the Offensive
Samsung needs to regain its customers’ trust. Abandoning the Note branding and folding it with the Galaxy S series may prove a good move by management. The advertising message is simpler. More importantly, consumers will not associate the exploding Note 7 with the Samsung name.
Despite strong iPhone 7 sales today, Apple’s next phone is at least four months behind that of Samsung’s latest release date.
Apple has an advantage over Samsung on the software side. The Galaxy’s voice assistant, Bixby, is behind that of AAPL’s Siri. Some consumers consider Samsung’s TouchWiz bloatware. But Apple keeps its operating system and the user interface uncluttered.
AAPL Stock’s Growth Beyond Phones
Apple’s submission to test self-driving cars gives investors a clue on its growth ambitions beyond smartphones. Already, Intel Corporation (NASDAQ:INTC) bought Mobileye N.V. (NYSE:MBLY) to gain the know-how in autonomous driving. BlackBerry Ltd. (NASDAQ:BBRY) committed to investing $100 million in developing software for self-driving cars, creating 650 new jobs. It is only natural that Apple follows this trend.
Apple is in the early innings of growing its business in the automotive market. For now, though, the company needs to release a new iPhone device that competes effectively against Samsung’s latest offering. Chances are good that Apple will not disappoint.
As of this writing, Chris Lau owned shares of BBRY stock.
