The countdown is on to the iPhone 8 launch. Apple Inc. (NASDAQ:AAPL) is expected to send out the invitations for a September event any day now and there is a lot riding on it. As iPhone sales go, so does does AAPL stock, and the monster launch everyone is hoping for would put a big smile on investors’ faces. However, Samsung Electronics Co Ltd (OTCMKTS:SSNLF) just put a speed bump in the way with the launch of the new Galaxy Note 8.
The smartphone Samsung unveiled yesterday in New York is its biggest and best ever. Even though it’s also Samsung’s most expensive smartphone ever, the Galaxy S8 still comes in under $1,000 — less than the iPhone 8 is predicted to go for. And it goes on sale Sept. 15, just in time to spoil the iPhone party.
Galaxy Note 8 Should Leave the Old Mess in the Dust
When Samsung botched the Galaxy Note 7 to the extent that battery fires forced the company to recall the devices altogether, AAPL had an opportunity. With Samsung’s reputation in tatters, Apple launched the iPhone 7 and briefly took the crown as world’s top smartphone vendor. However, Samsung has staged a remarkable comeback.
By Q1 2017, it had already taken back first place as the top-selling smartphone manufacturer. Samsung followed that up with a thorough investigation of the Galaxy Note 7 battery issues, along with a public apology and promise of new measures to prevent a repeat. It then launched the Galaxy S8, with an Infinity Edge display.
Yesterday, the company announced the new Galaxy Note 8 and the new flagship should put the Galaxy Note 7 well in the rear view mirror.
The Galaxy Note 8 could also cause some headaches for AAPL. One of the key features of the iPhone 8 is expected to be a new AMOLED display with minimal bezels. The Galaxy Note 8 features a huge 6.3-inch AMOLED Infinity display that wraps around the sides and leaves only minimal bezels on the top and bottom (it’s big enough to run two apps side-by-side). It also matches the wireless charging expected to be introduced as an Apple first with the iPhone 8, and includes iris scanning biometric security.
For the first time, Samsung is offering a dual-camera system similar to the one introduced with the iPhone 7 Plus — and expected to remain a key selling point of the iPhone 8. And early reports suggest the Galaxy Note 8’s version may top what Apple offers.
Possibly worst of all, the Galaxy Note 8 is expected to be priced at $929, unlocked. That sounds like a lot — and it is — but rumors have the iPhone 8 starting at anywhere from $1,000 to $1,200. If true, $929 might be considered a bargain.
Potential Impact on the iPhone 8 Launch
As previously mentioned, AAPL investors will be watching the iPhone 8 launch closely. Rumors have that happening on Sept. 12, but reports persist that Apple is experiencing manufacturing challenges that will mean constrained supply of the new iPhone into 2018. That alone would be bad news for AAPL stock (at least in the short-term), which has reached new highs in large part based on anticipation of record-setting sales as part of a monster iPhone upgrade cycle.
If the iPhone 8 is delayed, AAPL still has the iPhone 7s and 7s Plus also launching in September. But consumers who have been waiting for an all-new flagship may opt to skip those and either wait for the iPhone 8 to finally become available, or instead choose an alternative such as the Galaxy Note 8, which will be readily available starting Sept. 15 and seems likely to cost less than the iPhone 8.
Apple probably doesn’t need to worry about its hardcore fans. Someone who has bought three successive iPhones and owns a MacBook is unlikely to jump ship and buy an Android smartphone just because the iPhone 8 is expensive and hard to get. However, undecided buyers are a concern. Those who are buying their first smartphone, upgrading after many years, or who just plain don’t care whether they use iOS or Android could be a problem. And Samsung just gave them a pretty compelling alternative.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.