The smartphone battle is as heated as ever. Apple Inc. (NASDAQ:AAPL) just launched its new iPhone lineup, and Samsung is already voicing its plan to quickly imitate its biggest competitor. Is Apple’s first-move advantage enough to get the wheels under Apple’s stock moving?
Apple’s blazing chip to be mimicked
Two times faster than its predecessor, the A7 system-on-a-chip is some great technology. It’s the first time — ever — a 64-bit architecture found its way into a smartphone.
Moore’s Law isn’t running out of gas yet. Just check out this chart that Apple Inc. (NASDAQ:AAPL) showed at the iPhone launch.
Paired with Apple Inc. (NASDAQ:AAPL)’s motion-sensing M7, the iPhone 5s is a powerful computer.
Unfortunately for Apple Inc. (NASDAQ:AAPL), competition moves fast these days, Samsung in particular.
“[O]ur next smartphones will have 64-bit processing functionality,” said Samsung co-CEO Shin Jong-kyun in response to Apple Inc. (NASDAQ:AAPL)’s recent announcements.
Even worse, this means that Google Inc (NASDAQ:GOOG) is probably already developing a 64-bit version of its Android operating system. With Samsung’s flagship smartphones, the Galaxy S4 and the Galaxy Note 3 running on an Android OS, Google would have to launch a 64-bit version of its Android OS for Samsung’s next-generation smartphones to use a 64-bit chip. That means Google will lay the foundation for other original equipment manufacturers, or OEMs, to jump on the 64-bit bandwagon.
Splurging on Apple’s untapped opportunity
Thanks to Google Inc (NASDAQ:GOOG)’s free Android software, low-cost smartphones are taking over in China. According to IDC, Android boasts 69.1% market share in China with 73.5% year-over-year growth in unit shipments in the second quarter of 2013. The largest contributors to Android’s success? Samsung.
Much of Samsung’s success in China is based on an intentional strategy to go after the lower prices that Apple Inc. (NASDAQ:AAPL) has expressed little interest in. Capitalizing on Apple’s not-so-cheap iPhone 5c, which fails to hit a price point that would resonate with China’s mid-tier smartphone market, Samsung plans to aggressively pursue this avenue.