Will New Smartphones From Apple, Samsung, Sony And Others Make A Difference?

With two weeks to go until September, many -- particularly students and parents -- are in the throes of Back to School, a retail season the National Retail Federation (NRF) expects will total $26.7 billion this year. With companies like Dick’s Sporting Goods (DKS) missing earnings by a few pennies per share while Urban Outfitters (URBN) beats by a few, Back to School is at the forefront of the retail and stock market conversation this week, how could it not be?

Yet, ask a back to schooler be it to grade school, high school or even college student what they really want most and the answer comes up smartphone. There are a number of choices with various models from market share leader Samsung, including its Galaxy 4, and a number of others -- the Apple iPhone, LG’s Optimus, and HTC ’s One to name a few as well as models from Sony , Nokia , Blackberry (BBRY), Huawei, ZTE , Lenovo Group , and others. Look at data and usage habits for these devices and it's easy to see the quasi-addictive nature of these devices, particularly among younger demographics.

In the next few weeks, however, the choice of devices is going to get even harder as a slew of new products are set to hit the market. There is increasing talk that Apple will introduce not one but two new iPhone models in the coming weeks, including  a low-cost one. Apple is expected to hold a media event on September 10 and if history holds, we could see the new models in stores as soon as September 20.

Ahead of that rumored Apple event, Samsung is having one on September 4 at which it is expected to introduce an even larger form factor Galaxy Note product, which is dubbed a “phablet” form factor. The term refers to a smartphone that is large enough that it looks like a small tablet rather than a smartphone. If successful, perhaps this will bring back the man purse market for Coach and its competitors?

In addition to that phablet, Samsung is also expected to introduce a smartwatch that will be part of its “Galaxy Gear.” Of the two products to be introduced, it is the latter that will have my attention and I will be very curious to learn what this smartwatch will be capable of, what and how it will be connected to and what the user experience will be. Clearly, there are many questions and the answers will be illuminating in terms of assessing how real the wearables opportunity really is. Yes, we have products from Nike, Fitbit and others, but do consumers want a micro screen smartphone on their wrist or a more focused device that has less than a handful of compelling uses?

Samsung is not the only company expected to front run Apple -- Sony is slated to introduce its new Xperia smartphone also on September 4. With less than 5% smartphone market share, much like Nokia and Blackberry, Sony is doubling down on its smartphone efforts. Unlike Nokia and Blackberry, however, Sony’s strategy appears to one in which it will connect its smartphones, TVs and game consoles with the company’s entertainment content found in the Sony Entertainment Network.

Aside from new products from Apple, Samsung, and Sony, there will be other new smartphone models coming to the shelves near you very soon including HTC’s One mini that should be landing at AT&T on August 23rd. We also have to consider that before too long there will be a number of new tablets hitting the shelves as well, including an updated iPad and a phablet from Nokia among others.

While many will be watching the reception these new products may or may not enjoy, the question many existing smartphone users will ask themselves is how much better is this new model than the one I currently own?

If the difference is significant, we could see an upgrade wave result; if not, the other lever these companies can use to spur sales is price. From an investor’s perspective, that latter “strategy” if it can be called one is not one that makes for a successful long-term investment. Price as a weapon is rarely reversible and it tends to have a negative impact on not revenues but also margins and earnings. Those pressures tend to hit the stock price. Moreover, the growing presence of companies like Lenovo, ZTE and Huawei are, in my view, only going to accelerate that looming price war.

Noticeably absent this fall is Microsoft and as we all know if you don't have any new products to talk about, be sure to bash those from your competition.

As I’ve said before, we've seen this evolution in other consumer electronic products in the past and it almost always results in three players taking the bulk of the market share.

Over time, I don’t see how this smartphone market is going to be any different. That spells certain doom for those companies, like HTC, that can’t, don’t or won’t move beyond smartphones and into other markets, such as tablets, wearables, the Connected Car or the Connected Home. As mobile connectivity expands into newer markets, it’s smart investor that wants to be buying those key enabling companies -- kinda like buying the bullets, not the guns or blades instead of the razor -- that are seeing their market opportunity expand.