Apple Investors Shrug Off Samsung Galaxy S7 Launch
The Samsung Galaxy 7 is supposed to be the vanguard of the next generation of smartphones, just as the Apple (AAPL) iPhone 6 was the best-selling product of the generation that has just passed. At least, that is what Samsung wants consumers to believe. The release of the Galaxy S7 has not dented Apple's share price. As a matter of fact, it is up almost 10% over the past month to $102, which has allowed it to reclaim some of the nearly 14% it lost over the past three-month period.
The primary reason for the drop in Apple's shares is that its last set of earnings created anxiety that iPhone 6 sales had peaked and would begin to trail off until the company releases the iPhone 7, probably late this year. Skeptics believe that a new iPhone will not improve Apple's prospects because it cannot match the technology advances of the earlier generations of iPhones.
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Samsung is releasing the Galaxy S7 and Galaxy S7 edge with added features that include a water-resistant case, a "dual edge" screen (which apparently makes the screen appear larger), a better camera that works in "low-light" situations, a fast charging battery and expandable memory. Worth noting is that the Galaxy S7 edge, which sells for $792, is packaged with a "Gear VR powered by Oculus, plus a 6-game bundle" worth "an estimated $150." It might be argued that Samsung does not believe there is enough interest in the Galaxy S7, so it offers extra products to spur sales.
With all these new features, the S7 might be a worthy rival for the Apple iPhone 6 family. As smartphone sales growth slows around the world, market share becomes more important. Not more than three years ago, Samsung smartphones outsold Apple's. Samsung wants that position back.
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Samsung has the same basic problem Apple does. Smartphones have not advanced enough in terms of features to get consumers to upgrade in large numbers.
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