The Talking S4 Blues: Samsung Finds It Easier To Copy Apple Than To Lead

| About: Samsung Electronics (SSNLF)
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Samsung (OTC:SSNLF) has been widely praised for mobile phones using the Android OS that has been copied from Apple's iOS (NASDAQ:AAPL) nearly feature for feature. The phones Samsung marketed successfully look identical to the iPhone in fact Samsung itself admitted it copied Apple's iPhone. During one of the many lawsuits Samsung testified that they made a list of all features found on the iPhone that were not on their phones and then proceeded to update their phones item by item until they resembled the iPhone.

Samsung managed its first small geek tech victory over Apple a few years ago when Apple refused to allow Swype (NASDAQ:NUAN) on its phone. Texting with Swype is fast, fun and cool. It gave people a reason to prefer Samsung. Not a big deal to most people, but to those with large hands, texting with Swype is much easier. The second big win for Samsung was the surprising (to Apple) success of large phones. The S class phone has won several "best smartphone" awards worldwide. Though why this surprised Apple is a mystery, it is a fact that Apple has refused to compete in the large phone market. This has left Samsung 100 percent of the market for 4 generations of it S phone, now up to S4. The same is true with the All in One or Phablet market - the Note. Apple again has refused to acknowledge a market for hybrid phone pads. Apple has also refused to add a stylus and has refused to use Apple's vaunted hand writing recognition technology in their iPads. Thus they again refused to compete in a market for artists who would like a Wacom (OTC:WACMF) like tablet to carry around for the occasional sketch. Since by default Samsung became the leader in these mobile spaces, its Galaxy S4 and Note have become highly anticipated products.

Mostly the S phones were just larger and because of the size able to have more stuff inside them like memory, batteries, cameras, etc.. Nothing to really differentiate the phone from Apple's iPhone but if you wanted a large phone there was no where else to go and the S class was clearly good enough or better because it had Swype and was cheaper-nothing to be ignored. Each generation of the iPhone like but only bigger with Swype S class phones has been greeted with enthusiasm. So much so that the S4 was expected to move Samsung and Android to the forefront of smartphone technology and leave Apple trying to make the same phone one sixteenth of an inch thinner like they have been doing since 2007. Instead Samsung was criticized for the lack of innovation, the eye scrolling and TV remote control app not being enough to get anyone really excited. The fact that the phone is aware of your eye movements must have advertisers salivating and probably Google (NASDAQ:GOOG) worried. The Minority Report overtones notwithstanding ubergeeks like these kind of odd ball features that have little appeal to the masses.

The S class did well when it was basically just a larger phone with most of the same features of the iPhone. Now that more is expected from Samsung that company is finding tough sledding. However, as long as they have the market all to themselves with little competition from fringe players the S class will sell very well. People want a larger phone, but not one with eye scrolling that becomes a remote. You can pack a phone with a million features that appeal to heavy users but most of consumers just want a phone the can email, text and talk on with the use of an occasional app. Samsung is finding it is easier to follow than to lead. In view of the S4's limited buzz, Samsung investors might want to be cautious, while Wacom and Nuance are speculative bets on a possible relationship with Apple. Apple continues to be a stock filled with uncertainty and Google may have reached its Android fueled zenith.

Disclosure: I am long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.