"STREET PSYCHOANALYSIS" - AAPL
Pay No Attention To the Phone Behind the Curtain...
"Was that the strangest product roll-out you've ever seen?" asked Bloomberg's Tom Keene of the Samsung Galaxy S4 introduction (sans Rockettes) at Radio City Music Hall last night.
Why strange? Look at the S4's new features:
• Compared with the 4-inch iPhone 5 touchscreen, the S4 features a 5-inch touchscreen. Well, a sort of touchscreen. A new feature allows you to hold your fingers above the screen to control some functions. (Because no one wants to touch a touchscreen?)
• Another feature is eye tracking "Smart Pause," which stops a video when the screen tilts away from you. (Because there is no longer a pause button?) The much-hyped "Smart Scroll," which would follow a users eye movements via the front-facing camera to scroll screen content, was nowhere to be seen.
• Speaking of cameras, the S4 has front- and back-facing cameras that allow you to take a picture of the Knicks forward missing a shot at the buzzer while simultaneously photographing your grief-stricken reaction.
• The S4 does incorporates Mobeam technology, which allows shoppers to beam coupons from the S4 to supermarket laser scanners. Forbes' Anthony Wing Kosner stated (satirically?), "If anything can get American consumers to use their mobile phones for commerce it will be saving money at checkout through foolproof beaming coupons."
Wrote Gene Munster, Apple's analyst-in-chief, "While the phone might not offer significant incentives for iPhone users to switch over, it clearly offers an attractive alternative at the high end of the market. Apple needs to keep enhancing its offerings to compete well in the space."
Yeah. Let's "enhance" the iPHONE 6 to compete with these remarkable new features: a phone that I don't have to touch, that I can wave at, takes my picture while I'm taking yours and beams coupons for my shaving cream.
Nomura's Stuart Jeffrey wrote, "…there is much that is evolutionary about the S4, rather than revolutionary." I agree with Jeffrey's analysis, if not his price target. Why? Because, in response to the S4, Apple is up 2% this afternoon, breaking through $440 for the first time since February, and Samsung has dropped 2.6%.
What happened that was "strange" at last night's roll-out" was that the Radio City curtains were pulled back to reveal…a bigger, plastic smartphone, not the "Wizard of Seoul" sparking a new smartphone revolution. No incredible innovations. Just a phone you can wave to and that looks at you.
The Street doesn't trust Tim Cook to innovate and needs proof -- an iWATCH, an iTV, an iSOMETHING - that Apple hasn't lost its edge. Apparently the S4 introduction was enough to show The Street that Samsung (005930.KS) hasn't stolen Apple's edge. Psychologically, this was enough for the market to take a bite out of Samsung and, for once, not take a bite out of AAPL.
Disclosure: I am long AAPL.