Apple Inc. (NASDAQ: AAPL) might have expected that its successful patent suit against Samsung and the launch of the iPhone 5 would dampen demand for Samsung’s flagship smartphone, the Galaxy S III. As it turns out, the exposure the device got in the press as Apple seemed to hurt Samsung and word of mouth about the Galaxy S III appears to have helped Galaxy sales.
According to Localytics:
Yesterday Samsung added the iPhone 5 to its patent lawsuit against Apple and other manufacturers. This comes after Apple was awarded $1 billion for Samsung’s infringements. But sales of Samsung’s flagship Galaxy S III haven’t been hurt and appear to have been helped by the news. The powerhouse Android device saw average growth of 9% in new devices each week since August 1st, with huge spikes in Galaxy S III adoption occurring after the Apple lawsuit verdict and after the iPhone 5 announcement.
The reasons are not that simple.
Samsung had the Galaxy S III on the market three months before the iPhone 5. This gave reviewers and consumers plenty of time to consider the device without any side-by-side comparisons with Apple’s new product. Reviews were generally very positive. Samsung had used Google Inc.’s (NASDAQ: GOOG) Android operating system on early phones. By the time the Galaxy S III was launched, it had honed the OS and add-ons into a popular product. Sales of the product were unexpectedly strong, which sucked some of the demand for new smartphones out of the market.
The Samsung Galaxy S III works on the 4G networks build by AT&T Inc. (NYSE: T) Wireless, Verizon Wireless and Sprint Nextel Corp. (NYSE: S). The superfast networks have become the center of the marketing messages from these three companies, even above individual smartphone brands and products. Samsung has been building 4G devices for nearly two years and has become entrenched with service providers. The Galaxy S III only extended those Samsung relationships.
And the iPhone 5 has problems, the most well-known of which is with its map products. The Samsung Galaxy S III uses the more popular and better-working Google Maps. Samsung did not have to face an army of critics and customers who believed that it had a product with an inferior feature.
The verdict against Samsung and the launch of the iPhone 5 may have helped Galaxy S III sales, but the foundations of the reasons for those sales were already in place.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks