After struggling for several quarters, it looks like Samsung (XKRX:000830, Financial) has finally managed to outsmart its rival in the smartphone segment.
At the present stage, Samsung and Apple (AAPL, Financial) are the two most significant players in the smartphone industry. It appears that Samsung has finally defeated Apple, however, by introducing its latest flagship model Galaxy S7 and Galaxy S7 Edge.Â
Before Galaxy S7 and Galaxy S7 Edge, the company made Galaxy S6 and Galaxy S6 Edge, which lacked many features the Galaxy S7 models have. The Galaxy S6 models did not have a memory card slot and was not efficiently water proof while the Galaxy S7 and S7 Edge has upgraded RAM, water proof efficiency and most importantly, camera quality.
I believe it was Samsung’s strategy to introduce Galaxy S6 models first so users became attracted to the edge screen with fewer features and then to launch a new upgraded model with all the major advances to force users to upgrade from the S6 models to S7 models.
The updates are definitely drawing more customers Galaxy S7 sales are higher than its predecessor's. This trend will likely continue.
Purchasing Joyent is a great move
Recently, Samsung agreed to purchase Joyent in order to gain access to access a platform that can be used in its phone, IoT devices and cloud based services. At present, it cannot be said how much Joyent could add to the company’s bottom line, but It can certainly be said that Samsung is likely considering speeding up its mobile division, where Joyent will legitimately exist.
According to Gartner, the value of the public cloud services market is $204 billion at present. The company is now aggressively focusing on cloud software and services, and Joyent is a rock-solid move into the space. This could help Samsung gain traction in this wide market, which can act as a long-term tailwind for Samsung investors.
Conclusion
It seems like Samsung has outwitted Apple in the flagship smartphone segment this year, sales of its latest devices are soaring. While Apple’s iPhone 7 is yet to hit the market, it is highly unlikely that Apple would do better this time as Samsung has already taken a large chunk of the high-end phone market.
Disclosure: I don't hold a position in any of the stocks mentioned in the article.
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