The competition in the high-end smartphone arena is becoming tougher for Apple Inc. (NASDAQ:AAPL), with Samsung (NASDAQOTH:SSNLF) launching a newer model of its flagship Galaxy series, the S4.
The company has also decided to open up mini stores in Best Buys all around America. These stores will display the uniqueness of Samsung devices and should further boost Samsung’s sales. The financial aspects of the agreement have not been disclosed, but it should definitely benefit Best Buy Co., Inc. (NYSE:BBY) as well.
Galaxy Android
The smartphone industry is one of the most competitive industries in the technology sector, both in terms of products and litigation. The smartphone industry is a highly profitable industry, which is the primary reason all major players want to establish themselves in this space.
Apple Inc. (NASDAQ:AAPL) and Samsung are the two biggest players in the arena. Apple is primarily known for its high-end iPhones, which give it unworldly margins of as high as 55%. Apple Inc. (NASDAQ:AAPL) devices run on iOS, which is limited to only Apple. On the other hand, Samsung has built its smartphone following on the Android operating system.
Samsung (NASDAQOTH:SSNLF) is the face of Android and recent surveys indicate that Samsung’s Galaxy brand is considered interchangeable with the word Android. The S3 was the game changer for Samsung, helping it compete with the high end iPhone. The device has been instrumental in establishing Samsung as the leading smartphone company in the world.
The company has also gained a lot of traction with its Galaxy Note, Mini, and Grand models. The devices are particularly popular in Asia and South America, which are also the fastest growing smartphone markets in the world.
Samsung stores
Apple Inc. (NASDAQ:AAPL) has been able to build itself such a dedicated following due to a number of factors, which include superb quality, ecosystem effect, etc. But, Apple stores have played a major role in building a following for Apple. These stores have always been a sign of the uniqueness of Apple products and the solid after sales services they provide.
According to recent reports, Samsung also plans to open up Samsung stores inside Best Buy Co., Inc. (NYSE:BBY) stores. The company will open as many as 500 new stores which will take up as much as 460 square feet of prime space, and will be near the front of the retailer’s largest stores, according to Bloomberg.
Samsung (NASDAQOTH:SSNLF) has continuously faced criticism from Apple Inc. (NASDAQ:AAPL) for copying its designs and infringing on its patents. In a surprising decision, a Jury asked Samsung to pay a multi-billion dollar fine and increased the prospects of a ban on Samsung devices. Since then the decision has been modified and the fine almost halved, but the Korea-based giant has been tagged as a copycat of Apple’s technology.
A primary motive behind these stores is to improve the brand image of Samsung products. The company plans to display its newest devices in these stores and show American consumers the uniqueness of everything Samsung. According to the company, it will hire its own staff to demonstrate the interesting new features of its latest flagship Samsung Galaxy S4 phone.
Bottom line
Samsung (NASDAQOTH:SSNLF) has become the world’s largest smartphone manufacturer and the new S4 will further strengthen its number one position. The penetration of these devices is still relatively low in the U.S. compared with rest of the world. The new Best Buy-based mini stores will be a major leap in strengthening the position of the Galaxy range in North America.
Mohsin Saeed has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.
