Samsung Needs Galaxy S6 At This Point To Stand Out
Google's Android One Initiative: The Impact On Samsung
- Through Android One, Google is looking to improve the user experience on low-priced smartphones, enticing customers in emerging markets to upgrade.
- We believe the move could pose a threat to Samsung, the world's largest smartphone manufacturer.
- The initiative could potentially compound Samsung's market share woes in emerging countries, where we expect much of the growth in the smartphone market to come from.
- Samsung now reminds me of Apple of about a year ago. Apple stock price increased more than 50% since then.
- Looking past the current events of shrinking market share and lower profits, we find Samsung deeply undervalued.
- Using DCF valuation makes me believe Samsung is a great long-term opportunity.
- Samsung’s smartphone business has gravely suffered from the rapid ascent of Xiaomi.
- Xiaomi displaced Samsung as the top vendor in China. Global expansion plans for Xiaomi means Samsung’s market share in other countries also will likely decline.
- The two biggest mobile carriers in the Philippines now offer free Xiaomi Mi 3 to their post-paid subscribers. Carrier support will add to the massive growth of Xiaomi.
- Samsung launched three new devices on September 3rd, including the Galaxy Note 4 phablet.
- Apple's stock declined 4% due to positive reviews after the Samsung launch, and fears that the iPhone 6 launch would not live up to expectations.
- Xiaomi Corp. and Lenovo Group Ltd. are hitting Samsung on the lower end the market.
- Samsung's preemptive strike may have been an attempt to soften the blow from the iPhone 6 on the premium end of the market.
- Based on pent up demand, the iPhone 6 launch should be a success. I expect Apple's stock to bounce back above $100.
- The Samsung Galaxy Note 4 was good enough when compared to other Android handsets.
- However, the upcoming iPhone 6 may top the Note 4.
- The Galaxy Note Edge moves in the right direction wise, and keeps the company relevant in the high-end of the smartphone market.
- Samsung Unpacked Episode 2 Will Soon be Underway On September 3rd.
- The Galaxy Note 4 will be launched at the event, putting Samsung in the hot seat to compete with the larger iPhone 6 variant.
- Samsung will have to surprise at the event especially if it wants to retain the most market share amongst smartphone OEMs.
Do You Believe Samsung's Mobile Phone Business Is Worth More Than Zero?
- Samsung has underperformed the S&P 500 by nearly 1000 basis points over the past year. Today, Samsung shares trade at just 7x earnings.
- Samsung has an incredible track record of profitable growth over the past decades.
- Samsung shares are priced as if its handset business is worth 0. There are good reasons to believe this is not the case.
- When investors begin to believe that the handset business will continue to generate meaningful profits in the future, Samsung shares could rise 60%.
- Samsung recently announced its acquisition of US company SmartThings, which builds ways to connect home devices.
- The acquisition should solidify Samsung's competitive position, alongside rivals Apple and Google, with regard to the new "internet of things."
- The acquisition makes strong strategic and fiscal management sense, given Korea's newly instated corporate tax.
- With solid results YTD and growth at home and abroad, we reiterate our positive stance on Samsung in the second half of 2014.
Samsung Galaxy Note 4 To Hit Stores Before iPhone 6
Can Samsung 'Galaxy Tab S' Crush Apple's Tablet Market Share?
- “There Is No Tablet Market, Only An iPad Market” days are over. Flagship Samsung's tab product launch will be a full-on attack on Apple's moat in the high-end tablet market.
- Apple remains the undisputed market leader in the high-end of the tablet space, with around 32% share of the overall tablet market.
- As things stand, the consumer trend is seen to be shifting toward Android smartphones which certainly rings alarm bells for Apple.
- Specifications indicate that the Galaxy Tab S is a better machine for customers than the iPad: Thinner, lighter but with larger screens.
- Given Samsung's success in the smartphone market, chances are good that the Galaxy Tab S will be a smash hit.
Galaxy Note 4 And Galaxy S6: What Will Samsung Deliver?
Samsung Blinked - Its Decision To Call Down The Quarter May Be An Indicator Of Slowing Markets
- Samsung called down its Q2 earnings guidance.
- When the world's largest smartphone suppliers report sagging sales, investors need to listen.
- Evidence of increasing competition is everywhere with new entrants growing at break neck speeds.
- Apple's June quarter will be worth watching.
- Samsung has played a crucial role in making Google’s Android the world’s most popular mobile platform.
- Samsung has finally launched its highly anticipated Tizen based smartphone, the first of its kind, in a bid to reduce its reliance on Android.
- This, however, is not just about one smartphone as Samsung’s move can have far reaching implications.
Samsung Launches Premium Tablets, But Going After Apple's Market Share Could Be A Challenge
- Samsung's new tablets may not contribute significantly to the bottom line given the possible high manufacturing costs and competition from Apple's iPad.
- The high-end of the smartphone and tablet market is all about the margins.
- Additionally, the company's marketing and promotional costs for the device could also be significant.
- Samsung is set to launch its high-end tablet product, the Galaxy Tab S, which is a major threat to Apple's iPads.
- Specifications indicate that the Galaxy Tab S is a better deal for customers than the iPad: Thinner, lighter, but with larger screens.
- Samsung is smart enough to leverage its Galaxy S success by building on established technology and market recognition.
- Given Samsung's success in the smartphone market, chances are good that the Galaxy Tab S will be a smash hit.
- Samsung's tablet product launch will be a full-on attack on Apple's moat in the high-end tablet market.
Is Samsung Finally In The Smartphone Driver's Seat?
- Never before has Samsung been stronger relative to Apple.
- The Galaxy S5 and iPhone 5s are both "mature" products.
- Samsung recently announced its first Tizen OS smartphone.
- SSNLF was recently ordered to pay Apple $120 million for patent infringement on three of its patents.
- Apple is continuing to pressure Samsung to bar another nine of its devices.
- Although Apple is more flexible to fight Samsung, after recently resolving issues with Google, Samsung's strength YTD will likely not be strongly affected.
There are no Transcripts on SSNLF.
Thu, Mar. 6, 7:10 AM
- Judge Lucy Koh has turned down a request from Apple (AAPL) to ban certain Samsung (SSNLF) mobile products in the U.S. because of patent infringements.
- However, Koh did complete a $929.8M damages award to Apple stemming from the companies' IP dispute.
- Apple and Samsung are due to face each other again this month in a trial over Apple patents different to those involved in the $929.8M award.
Wed, Mar. 5, 6:06 PM
- After growing ~60% in 2013 (and fueling global shipment growth of 39%), IDC expects Chinese smartphone shipment growth to slow to ~20% in 2014 and just ~10% in 2015.
- Though only 40% of China's 1B+ mobile users now use a smartphone, IDC's Kiranjeet Kaur notes most users who can comfortably afford a smartphone have already bought one. Plunging low-end Android prices could expand the addressable market in a country whose nominal per capita GDP is around $6K.
- India, which has a sub-10% smartphone penetration rate, still presents a major growth opportunity. But with a nominal per capita GDP of ~$1,500, the country is even more cost-sensitive than China.
- With China slowing down and developed markets living up to their name, IDC expects global smartphone growth to slow to 19% in 2014; that still spells total volumes of 1.2B. Tough competition and the ongoing mix shift towards emerging markets is expected to lead the industry's ASP to fall $27 to $308.
- Smartphone OEMs with strong Chinese exposure: AAPL, SSNLF, LNVGY, ZTCOY
- Chip suppliers: QCOM, BRCM, CRUS, SWKS, RFMD, MRVL
- Chinese carriers: CHL, CHU, CHA
Mon, Feb. 24, 3:05 PM
- Samsung's (SSNLF, SSNGY) Galaxy S5 is the first smartphone to support 802.11ac 2x MIMO, a technology that doubles theoretical peak download speeds to 867Mbps compared with regular 802.11ac (supported by the Galaxy S4).
- MIMO support is likely a positive for Samsung combo chip supplier Broadcom (BRCM +0.6%). Broadcom just happened to announce its first 802.11ac 2x2 (antenna) MIMO smartphone combo chip this morning.
- The S5 is also the first smartphone to support phase-detection autofocus (found in SLRs), and among the first to support on-the-fly HDR processing. Samsung claims the S5's auto-focus time (0.3 seconds) is unmatched.
- Along with the S5, Samsung is launching a companion fitness tracker called the Gear Fit. The device can receive notifications from Samsung smartphones, and will compete in a crowded market headlined by Nike's FuelBand.
- The Verge isn't impressed by the S5's fingerprint scanner, calling it "quite unreliable and virtually impossible to activate when holding the phone in one hand." It offers a more positive take on the device's heart monitor.
- S5 event live blogs: I, II
Mon, Feb. 24, 2:40 PM
- As expected, Samsung (SSNLF, SSNGY) has unveiled its next-gen flagship smartphone at a Mobile World Congress event (live blog). Whereas the Korean electronics giant trumpeted a variety of bells and whistles (some might say gimmicks) when launching the Galaxy S4 a year ago, it's taking a more low-key approach with the S5.
- The S5 has a 5.1" display, just slightly larger than the S4's 5" display. The resolution is unchanged at 1080p; past reports had pointed to a 2K resolution. Like Apple (AAPL) with the iPhone 5S, Samsung is integrating a fingerprint sensor into the S5's home button, and is offering a gold model.
- A 16MP camera supporting 4K video recording is included (the S4 has a 13MP camera), as is a perforated back meant to provide better grip. Qualcomm's (QCOM +0.2%) Snapdragon 801 baseband/app processor (2.5GHz., quad-core) powers the device. A heart rate monitor and slightly larger battery are also on board.
- Remarks from co-CEO JK Shin point to a shift in Samsung's product philosophy, one that arguably meshes with reports of a deal with Google to tone down Samsung's efforts to customize its hardware. "Our consumers do not want eye-popping technology or the most complex technology."
- Likely S5 suppliers with strong exposure: OLED, MXIM, SYNA, ANAD
Mon, Feb. 24, 4:00 AM
- The World Mobile Congress has kicked off in Barcelona, with speakers such as Mark Zuckerberg and Jan Koum emphasizing the intersection of computing and mobile.
- Samsung (SSNLF) has already introduced the first two smartwatches that are based on its Tizen operating system rather than on Android.
- The Gear 2 and Gear 2 Neo devices are due to go on sale in April and are compatible with many of Samsung’s Android-based Galaxy smartphones.
- More on Mobile World Congress.
Sun, Feb. 23, 2:11 AM
- Apple (AAPL) and Samsung (SSNGY) are set to face each other again in court at the end of March after the two companies failed to resolve their patent dispute in the U.S. during mediation that included Tim Cook and Samsung co-CEO J.K. Shin.
- The latest trial will involve Apple IP that Samsung allegedly breached in relatively recent products, including the Galaxy S III smartphone.
- Separately, Apple will issue a software update "very soon" to fix a security flaw in PCs running the company's Mac OS X operating system. The glitch leaves email, financial information and other sensitive data exposed.
- On Friday, Apple released a fix for mobile devices running iOS.
Tue, Feb. 18, 6:38 PM
- A source tells The Verge Samsung (SSNLF, SSNGY) "could take the wraps off multiple new Galaxy Gear wearables" at next week's Mobile World Congress. Meanwhile, USA Today reports a new version of the Gear will run on the Tizen OS; the original Gear, widely panned in reviews, runs on Android.
- Samsung is working hard to promote Tizen in the hopes of lowering its dependence on Android (and thus Google). But carrier support has wavered in the face of Android's overwhelming popularity and huge apps/services ecosystem.
- The Gear reports come as the rumor mill for Samsung's Galaxy S5, expected to launch at a Feb. 24 MWC event, continues to churn. Bloomberg backs up past reports by stating the S5 will have a "sharper" (higher-resolution?) 5.2" screen to go with a "larger battery and camera." SamMobile states the S5 (like the iPhone 5S) will have a fingerprint sensor built into its home button.
Tue, Feb. 4, 2:07 PM
- Samsung (SSNLF) has sent out invites for a Feb. 24 event at the Mobile World Congress that's expected to feature the launch of the Galaxy S5. Separately, Korean and Indian sites indicate the S5, like the S4, will eventually be accompanied by a water/dust-resistant Active version, and a Zoom version featuring a camera with an optical zoom.
- The timing of the S5 event is three weeks ahead of when the S4 launched last year.
- The S5 is expected to have ~5.25" display with a whopping 2K (2560x1440) resolution, a 16MP camera, and a fingerprint sensor. It might also ship in both a costlier metal version and a cheaper plastic version.
- The launch of Samsung's next flagship will follow a downbeat Q4 report, and a reported deal with Google in which Samsung agreed to tone down its efforts to offer custom apps/UIs for its Android hardware.
- Samsung is facing stiffening competition from Chinese OEMs as Android sales continue seeing a mix shift towards cheaper hardware (often sold in emerging markets). Following an epic rise from 2011-2013, IDC estimates Samsung's smartphone share fell 30 bps Y/Y in Q4 to 28.8%.
- Companies likely to have strong S5 exposure (as a % of total revenue): OLED, ANAD, SYNA, RFMD, MXIM.
Fri, Jan. 31, 7:20 PM
- After taking in Google's (GOOG) Q4 numbers, FBR estimates handing off Motorola Mobility to Lenovo (LNVGY) could boost the Web giant's op. margin by as much as 500 bps. Whereas Google proper has an op. margin of 34%, Motorola's losses dragged down the company's total op. margin to 29%.
- TechCrunch reports that with Motorola gone, newly-acquired Nest will serve as Google's primary hardware team. Nest, founded by iPod "godfather" Tony Fadell, will reportedly develop gadgets very different from the smart thermostats/smoke alarms it's known for.
- Many observers think the Lenovo sale is at least partly tied to Google's recent deals with Samsung (SSNLF). The reasoning: Samsung's reported willingness to embrace a vision of Android closer to Google's (toning down support for custom apps/UIs, and promoting Google apps/services) is linked to Google's decision to sell its mobile hardware unit.
- It's possible Google also gave Samsung favorable terms in their recent cross-licensing deal. In terms of patent portfolio/breadth, Google held the upper hand.
- In addition to keeping most of Motorola's patents, Google is holding onto the company's Advanced Technology unit, which is responsible for the Project Ara modular phone initiative.
- Lenovo says it will keep the Motorola brand in the U.S., and that it aims to eventually pass Apple and Samsung to be the world's largest smartphone vendor.
- Previous: Google earnings coverage
Wed, Jan. 29, 5:25 PM
- Just an hour after reports emerged Google (GOOG) is set to sell Motorola's phone ops to Lenovo (LNVGY), the deal has been announced by Larry Page. Lenovo will pay $2.91B for the struggling, loss-generating smartphone maker; Google will retain the "vast majority" of its patents.
- Page explains the deal by stating the smartphone market is "super competitive," and that "it helps to be all-in." He promises the sale doesn't have broader implications for Google's hardware efforts.
- Google paid $12.5B for Motorola Mobility in 2011. After backing out the Lenovo sale, the Arris sale, and $3.5B in cash, Google effectively paid ~$3.7B for Motorola's patents, assuming one doesn't count the losses the phone unit has produced under Google's control.
- The sale expands Lenovo's U.S. presence, and gives it access to Motorola's respected hardware engineering teams as it tries to grab high-end Android share from market leader Samsung (SSNLF). IDC estimates Lenovo had a 4.9% smartphone share in Q4 (up from 4.1% a year ago).
- The deal also removes a point of friction between Google and its Android partners. It shortly follows a report stating Google has pressured Samsung to tone down its Android UI changes and more strongly emphasize Google's apps/services, as it tries to exert greater control over Android's look and feel.
- GOOG +2.2% AH. In addition to the Motorola deal, shares could be getting a lift from Facebook's Q4 beat.
Mon, Jan. 27, 11:36 AM
- The Korea Times reports Samsung (SSNLF, SSNGY) is working on a Google Glass alternative tentatively called Galaxy Glass, and plans to launch it at September's IFA consumer electronics show "at the earliest."
- Google Glass microdisplay supplier Himax (HIMX +5.3%) is rallying in response. The sell-side has been optimistic about rising sales of Himax's LCOS microdisplays to buyers not named Google. Himax told Chardan Capital last September it's in the early stages of ramping microdisplay production for another client; Chardan believed the company in question is Microsoft, which was later reported by the WSJ to be prototyping a smart glass product.
- The Samsung report comes amid a harsh critical and consumer response to the electronics giant's Galaxy Gear smartwatch. To effectively compete against Google, Samsung will need to build a developer ecosystem that's at least reasonably competitive with the one Google is creating for Glass.
Mon, Jan. 27, 3:09 AM
- Samsung (SSNLF) and Google (GOOG) have signed a global patent-licensing agreement to share existing IP and patents filed within the next 10 years.
- The companies said the pact will "lead to deeper collaboration on research and development of current and future projects."
- Korean patent lawyer Jung Dong Joon reckons the deal will provide Samsung with a major ally in its global IP legal battle with Apple. (PR)
- Meanwhile, Samsung has finalized a multi-year licensing deal with Ericsson (ERIC) that will end all IP-related legal disputes. Samsung will pay an initial sum and then royalties.
- The agreement will affect Ericsson's Q4 sales by 4.2B Swedish kroner ($652M) and net income by 3.3B kroner. (PR)
Fri, Jan. 24, 2:08 PM
- Chip equipment stocks aren't getting spared from a general market selloff after Samsung (SSNLF - the world's #2 chipmaker) guided for its 2014 chip capex to be flat Y/Y. AMAT -1.6%. LRCX -3.7%. ASML -0.7%. UTEK -2.2%. RTEC -3.2%. MTSN -5.1%.
- Industry analyst Robert Marie observes this is the first time since 2009 that Samsung hasn't upped its chip capex budget. With Intel and TSMC (the industry's two other big clients) also guiding for capex to be flat (if not down) this year, Marie is cautious about 2014 growth, even though others have forecast sales will rebound sharply this year following a rough 2013.
- KLA-Tencor (KLAC -2.2%) is joining the selloff even though the company posted an FQ2 EPS beat yesterday afternoon, and provided healthy FQ3 guidance - revenue of $790M-$850M and EPS of $1-$1.20 vs. a consensus of $814.5M and $1.11 - on its CC (transcript). KLA also forecast FQ3 bookings will be in a range of $700M-$800M (implies 10% Q/Q growth at the midpoint), and struck an upbeat tone about 2014 investments in 20nm and 3D NAND flash capacity.
- KLA still expects 10%+ industry growth this year, but admits its outlook is "slightly weaker" than it was three months ago. The company also believes industry adoption of EUV lithography (important for ASML) has generally been pushed out to the 7nm process node from the 10nm node.
Fri, Jan. 24, 2:21 AM
- Samsung's (SSNLF) net-profit growth slowed significantly in Q4, rising 5.4% on year to 7.3T ($6.7B) won vs an increase of 25.6% in Q3.
- Sales increased 5.7% from a year earlier to 59.3 trillion won.
- Operating profit -6% to 8.31T won, the first drop in two years.
- The company warned that it will be "challenging" to improve its earnings in Q1, "as the weak seasonality of the IT industry will put pressure on demand for components and TV products."
- The strength of the Korean won hurt earnings by 700B won ($651M), and the company took an 800B won one-time charge related to employee bonuses.
- Operating profit at Samsung's mobile unit was flat on year at 5.47T won but down from a record 6.7T won in Q3, hurt by the release of new iPhones.
- Samsung expects Q1 smartphone shipments to rise at a "mid-single digit" pace on quarter and tablet shipments at a "high single-digit" rate.
- Further operating profit breakdown: chip division rose to 1.99T won from 1.42T won a year earlier; display plunged 90% to 110B won, dragged down by weaker-than-forecast sales of the Galaxy S4 and poor demand for TVs; consumer-electronics dropped to to 660B won from 700B won.
- Samsung intends to spend a similar amount on capex in 2014 as in 2013, when it invested 23.8T won.
- Shares closed +3% in Seoul.
Thu, Jan. 23, 12:34 PM
- Backing up several reports in recent months, the WSJ reports Apple (AAPL -0.8%) plans to launch two larger iPhones in 2H14: One with a 4.5"+ display, and one with a 5"+ display.
- The paper adds both devices will use metal casings and won't feature curved displays, and that Apple is "expected to scrap the plastic exterior used in the iPhone 5C."
- The WSJ previously reported Apple is evaluating iPhones with 4.8"-6" displays, and Bloomberg has reported Apple plans to launch 4.7" and 5.5" iPhones with "glass that curves downward at the edges."
- More recently, Cowen's Timothy Arcuri has said supply chain checks point to the launch of a 4.8" iPhone supporting the high-speed 802.11ac Wi-Fi standard (already supported by various Apple and Samsung devices). Like others, Arcuri also expects a ~13" iPad to launch this year.
- Calls for Apple to offer larger iPhones have been widespread amid soaring demand for large-screen Android devices, particularly in China and other parts of Asia-Pac. The launches could allow Apple to win back some European and Asian smartphone share lost in recent quarters to Samsung (SSNLF, SSNGY) and others.
Wed, Jan. 15, 5:41 PM
- Mobile-Review.com's Eldar Murtazin, who has provided some accurate Windows Phone scoops before, reports Microsoft (MSFT) will be making $2.6B in "support" payments (likely including marketing spend) to OEM partners in 2014 to compel them to make one Windows Phone apiece.
- Samsung (SSNLF, SSNLF) is said to be receiving $1.2B, Sony (SNE) $500M, Huawei $600M, and other firms $300M.
- If the report is accurate, it suggests Microsoft's Windows Phone investments could more than negate the considerable Android royalties it stands to receive this year.
- It comes just as evidence appears Samsung is prepping a Windows Phone with a 5" 1080p display. The phone's inclusion of a 3G EV-DO radio (to go with a 4G LTE radio) suggests it could be sold by Verizon and/or Sprint.
- Sony recently confirmed it's talking with Microsoft about making a Windows Phone. With Nokia's soon-to-be-acquired phone unit accounting for the lion's share of WP sales, Microsoft has made expanding OEM support a priority.
- Update: A Microsoft exec denies the report.
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