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Best Buy Stock Soars on Samsung Experience Shop Deal

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By Adam Levine-Weinberg, The Motley Fool

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On Thursday, Best Buy stock climbed 16% following news that Samsung would open “Samsung Experience Shops” in more than 1,400 Best Buy stores over the next few months. The first 500 shops will begin opening as early as April 8, according to Bloomberg. This first batch of Samsung Experience Shops will take up approximately 460 square feet of prime space near the front of the Best Buy stores, and will feature “Samsung Experience Consultants.” These personnel will be hired and trained by Samsung to assist customers who are interested in Samsung devices.
A Samsung Experience Shop prototype. Source: Samsung.

This move appears to be a clear win-win for Samsung and Best Buy. That said, Best Buy stock has really run ahead of the company’s fundamentals. While domestic comparable-store sales increased last quarter — for the first time in more than a year — EPS was still down by 25% year over year. Nevertheless, the stock has more than doubled in the last three months.

Best Buy 3-month stock chart, data by YCharts.

Best Buy CEO Hubert Joly still has his work cut out for him in his effort to turn the struggling electronics giant around. While Best Buy‘s price-matching strategy has made the company more competitive with Amazon.com , Amazon is likely to continue chipping away at Best Buy‘s electronics market share over time, while pressuring its gross margin. Accordingly, I would view the recent run-up as a good opportunity for shareholders to take profits on Best Buy stock.

Benefits of the partnership
Samsung has made great progress in catching up to Apple in the mobile device market over the past few years, but the company has had trouble breaking Apple’s stranglehold on the U.S. market. One of the main barriers for Samsung has been Apple’s strong retail presence in the U.S., where it operates roughly 250 Apple Stores. The knowledgeable staff and strong customer-service orientation of Apple retail stores draws in new customers, and the large U.S. store footprint is a major reason Apple is so dominant here. In fact, the iPhone surpassed 50% market share in the U.S. last fall.

While the Samsung Experience Shops obviously will not be able to provide the same kind of experience as the Apple Store in 460 square feet, they will still vastly improve Samsung’s U.S. retail presence. Samsung will benefit from Best Buy‘s strong traffic, but conversely, the Samsung shops may bring new traffic into the stores. Moreover, this partnership highlights the promise of Best Buy‘s strategy of reallocating square footage from declining categories like CDs and DVDs toward growth areas like mobile devices.

But Best Buy stock seems pricey
As I wrote last month, analysts predicting Best Buy‘s demise have gotten ahead of themselves. The introduction of price-matching in the U.S. had a clear positive impact on the company’s results last quarter, and Best Buy‘s decision to continue matching competitors’ prices year-round should …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Samsung's Latest Attempt to Steal Google's Spotlight

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By Evan Niu, CFA, The Motley Fool

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There should be no doubting now that Samsung is trying to undermine Google as much as it is Apple. The South Korean conglomerate’s penchant for imitation shows no sign of abating, and the company is now broadening this strategy beyond hardware and aggressively trying to get into content and services.

Samsung is naming its storefront the remarkably self-explanatory Samsung Content & Services, which will take direct shots at both the iTunes App Store and Google Play. Following its latest Apple carbon copy of the Passbook app, Samsung is now introducing AllShare Play and Find My Mobile services, which are the company’s versions of AirPlay and Find My iPhone.

AllShare Play. Source: Samsung.

The repository was launched just two days ago and the app section looks uncannily similar to Google Play. Last month at Mobile World Congress, Samsung made it clear that bolstering its content and services platform was a critical strategic goal this year, according to Korea IT News.

Going rogue
There’s been some speculation recently that Samsung may be interested in forking Android at some point in the near future in order to gain more control over the user experience. However, that would entail some major risks and undoubtedly ruin its relationship with the search giant, which it still relies on for the operating system that powers all of its most popular mobile gadgets.

If Samsung were to theoretically go completely rogue, it would stop getting early access to the newest Android builds along with other forms of collaboration from Google. All of Big G’s services that tie directly into Android could potentially go by the wayside. That could prove fatal for Samsung’s prospects, especially in the important U.S. market.

It’s been done before
Although if history has any lessons for us, look no further than Amazon.com . To date, the e-tail giant has been the most successful Android forker with its Kindle Fire family of tablets.

Amazon grabbed 11.5% of the tablet market in the fourth quarter with 6 million units shipped, and all of those devices are feeding directly into its own content and services offerings instead of Google’s official Android outlets. Amazon is the success story for any would-be forkers to emulate.

It all started when Amazon initially set up its Appstore for Android back in March 2011 — six months before it launched the first Kindle Fire. At the time, there was much speculation that Amazon was preparing a new line of hardware, and opening a distinct Android store that was separate from Google’s made the e-tailer’s intentions crystal clear.

Amazon wouldn’t have been able to succeed without the Appstore, and it already had plenty of other types of digital content to complement. Setting up a separate storefront is the first step on the path to forking — a step that Samsung is now taking.

Baby steps
While it’s a long journey from setting up shop to going completely rogue with a fully …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

2 Winners From Samsung's Galaxy S4

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By Evan Niu, CFA, The Motley Fool

Samsung Galaxy S4 with AMOLED display. Source: Samsung.

On the display front, Samsung has put a full 1,080p HD resolution into the 5-inch display. There was speculation that the company was having trouble manufacturing OLED displays of this caliber and would switch to a different display technology, even though the company has been one of the biggest proponents of OLED technology. Fortunately for Universal Display investors, Samsung has gone with an AMOLED display in the Galaxy S4, which will boost UDC‘s material sales.

If the Galaxy S4 does as well as the previous generation, these suppliers will hitch a ride to the upside.

Universal Display has a powerful patent portfolio behind OLEDs, a technology poised to dominate the displays of the future. Its placement at the center of OLEDs makes the company an underappreciated way to play the

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South Korean heavyweight Samsung has now taken the wraps off of its latest and greatest flagship smartphone, the Galaxy S4. Leading up to the event, there was a steady stream of rumors and supply chain leaks as to what the company might have up its sleeve for the follow up to its popular Galaxy S III device.

From the perspective of smartphone component suppliers, higher volumes mean scoring a design win in the device can be quite a boon for the top line. The previous Galaxy S III was the No. 3 smartphone in the world in the fourth quarter, and the new model has potential to fetch similarly high volumes. Two of the more important possible suppliers heading into the unveiling were Qualcomm and Universal Display .

Expectedly, Qualcomm scored some of the processor win with its Snapdragon processors. Samsung targets a wide range of carriers and geographies and tailors different variants to different regions. Since Qualcomm has huge advantages in LTE integration, Snapdragons will be found in the U.S. variants, since LTE is a requisite feature of any high-end flagship hoping to compete domestically. In other parts of the world that are still primarily on 3G, Samsung is using its own Exynos 5 Octa chips.

Samsung Galaxy S4 with AMOLED display. Source: Samsung.

On the display front, Samsung has put a full 1,080p HD resolution into the 5-inch display. There was speculation that the company was having trouble manufacturing OLED displays of this caliber and would switch to a different display technology, even though the company has been one of the biggest proponents of OLED technology. Fortunately for Universal Display investors, Samsung has gone with an AMOLED display in the Galaxy S4, which will boost UDC‘s material sales.

If the Galaxy S4 does as well as the previous generation, these suppliers will hitch a ride to the upside.

Universal Display has a powerful patent portfolio behind OLEDs, a technology poised to dominate the displays of the future. Its placement at the center of OLEDs makes the company an underappreciated way to play the enormous sales growth in tablets and smartphones. However, like any new technology, there are plenty of risks to Universal Display. I’ve written a new premium report that dives into reasons to buy the company as well as the challenges facing it. For access to this comprehensive report, simply click here now.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Apple Has Samsung to Thank for Today's Rally

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By Evan Niu, CFA, The Motley Fool

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Here’s something you don’t see every day: Apple posting strong gains while the market lags. Days like this have been few and far between over the past several months. Who does Apple have to thank for this rally? Samsung.

Wait, what?
The South Korean conglomerate unveiled its newest Galaxy S4 last night at an enormous media event in New York City. The debut has been one of the most widely anticipated consumer product launches in months, as Samsung has been very aggressively building hype for the device primarily through an unrelenting marketing campaign that ensures the word “Galaxy” is never far from the consumer eye.

Galaxy S4. Source: Samsung.

Much like the iPhone 5, the Galaxy S4 didn’t have any major surprises for consumers and investors, as quite literally all details were leaked in advance in some form or fashion. Both devices are now the current flagships for each respective company, and will garner their fair shares of smartphone sales over the coming months.

The reason why Apple investors are feeling confident today is that the Galaxy S4 may not be able to live up to the hype. That’s the downside of an overt attempt to artificially drive anticipation, since it can potentially lead to feelings of disappointment. The Galaxy S IV simply isn’t as big of an improvement as Samsung had led us to believe it would be.

Only Apple can pull off an Apple
There have been countless ways that Samsung has been copying Apple in recent years, and the Galaxy S4 is indicative of yet another way: incremental upgrades. Over the past six years, Apple has very successfully implemented a tick-tock strategy with iPhone upgrades, borrowing the strategy from Intel‘s arsenal.

The Cupertino company alternates major redesigns with incremental improvements each year. The most impressive part? This strategy simply shouldn’t work in the high-flying and cutthroat smartphone market. In a world where most smartphone designs become dated in a matter of months, Apple is able to milk two years from a single external design without consumer fatigue. Apple has been able to execute this through a combination of higher build quality, robust app content, brand strength, and software differentiation.

Samsung, on the other hand, is still mostly a commoditized Google Android OEM. It has less strategic leverage to pull off such a move, as there is an army of OEMs lining up behind it all eager to take the Android crown. “Differentiated” software layers like Samsung’s TouchWiz will only go so far, though Samsung’s sheer size and marketing budget has become an important competitive advantage. After all, not every OEM can roll out to 327 carriers in 155 countries around the world in a matter of months.

Still, the market‘s tolerance of incremental upgrades will be much lower for a commoditized player relative to a differentiated company, and investors are optimistic that Samsung’s new threat won’t be as significant as feared.

Word on the Street
…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Samsung's Galaxy S IV Arrives Next Week: Here's What to Expect

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By Evan Niu, CFA, The Motley Fool

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South Korean giant Samsung is set to unveil its latest and greatest smartphone, the Galaxy S IV, on Tuesday at an “Unpacked” event in New York. One of the ways Samsung has successfully replicated Apple‘s success in recent times is that there’s quite a buzz going around about what Samsung may have up its sleeve to follow up its successful Galaxy S III.

The company isn’t mincing words here, either. Make no mistake: the Galaxy S IV is being unveiled.

Source: Samsung.

Samsung has had incredible success with its Galaxy S series of smartphones, announcing in January that it had reached 100 million in unit channel sales. The company was the largest smartphone vendor in the world in 2012 ,and the Galaxy S III was ranked the No. 3 smartphone worldwide in the fourth quarter behind the iPhone.

Galaxy S III. Source: Samsung.

What can we expect on March 14?

Keep on biggering
Samsung has continued to push the envelope with device size and is one of the leaders of the phablet movement. Each generation of the Galaxy S has gotten successively bigger, and the S IV isn’t expected to break this trend.

Model

Display Size

Display Resolution

Galaxy S

4 inches

800 x 480

Galaxy S II

4.3 inches

800 x 480

Galaxy S III

4.8 inches

1280 x 720

Galaxy S IV

5 inches*

1920 x 1080*

Sources: Samsung and SamMobile.
*Rumored.

There’s been some debate over the display. Samsung is one of the biggest proponents of OLED displays, which has been greatly beneficial for OLED specialist Universal Display over the past few years, as Samsung’s unit shipments have soared. The company was reportedly facing some production challenges with manufacturing AMOLED displays at the full HD resolution it wanted, and as such it may have been considering a different display technology.

However, the most recent rumblings from SamMobile suggest that Samsung is going with a new type of AMOLED display that will be 25% more power-efficient. That’s incrementally beneficial for Universal Display, even if the company is still waiting on OLED TVs to ramp up.

All that and a bag of chips
On the processor front, Samsung had also been reportedly running into power issues with its Exynos 5 Octa processor and was thinking about sticking with a Qualcomm Snapdragon chip. The Exynos 5 Octa combines two different quad-core processors and is among the first implementations of ARM Holdings‘ big.LITTLE architecture, where high-performance cores sit alongside energy-efficient cores. In this case, Samsung is using four Cortex-A7 cores and four Cortex-A15 cores.

The Exynos 5 Octa technically has eight cores and as such will inevitably marketed as an eight-core processor, although this is slightly misleading, since only four cores can be active at any given time, depending on the task at hand. Qualcomm CEO …read more
Source: FULL ARTICLE at DailyFinance