This Could Be Huge for Samsung Stock
Samsung Electronics Co Ltd (OTCMKTS:SSNLF) is going after Apple Inc. (NASDAQ:AAPL).
Samsung stock posted a strong recovery since last fall, moving from $875.00 per share to $1,100 per share. The growth trend could intensify, thanks to Samsung’s two latest high-end smartphones. The company presented the “Galaxy S7” and the “Galaxy S7 Edge” in Barcelona on February 21. The venue was the Mobile World Congress (MWC), the world’s biggest annual mobile phone show.
The year 2016 is starting to look like a boon year for smartphones. Samsung has made its new big launch and Apple will have a chance to respond later with the “iPhone 7,” in the last quarter.
Having said that, the star of the year might well be the virtual reality (VR) sector. VR gaming headsets will start to hit store shelves in the first half of 2016 and Samsung has enjoyed a significant head start in this segment over competitors like Apple. This should certainly benefit Samsung stock in the medium-term.
As for the latest Samsung Galaxy models, these could outperform Apple’s latest iPhones, including the “iPhone 6S.” (Source: “Samsung Galaxy S7 launch as it happened: The latest news from the Unpacked event at Mobile World Congress,” The Independent, February 22, 2016.)
Samsung’s latest Galaxy comes with a 5.1-inch screen, while the Edge is a little larger with its 5.5-inch screen. The new products, which will be available in March, come in capacities of 32 GB and 64GB. As for the camera, the previous Galaxy family, the “S6,” was renowned for the quality of its photographs; the S7 will push this tradition of excellence thanks to its new dual pixel technology.
The result, based on the characteristics on paper, is a smartphone camera with a more responsive autofocus, as well as faster release and better definition. The camera has a motion mode, which makes it possible to take panoramic photos. The Galaxy S7 is also waterproof.
However, Samsung is not simply focused on taking on Apple’s smartphones. Samsung has certainly proven its expertise. If it hasn’t already, it has all the cards needed to emerge as the most powerful smartphone company. Nevertheless, as important as smartphones are to Samsung’s corporate image—and sales—investors in Samsung stock should note its developments in virtual reality.
While the apparent focus of its Barcelona presentation was the new Galaxy S7, delegates at the presentation were sitting in seats, featuring the “Samsung Gear VR” headset. None other than Facebook’s CEO, Mark Zuckerberg, appeared, as the 3,000 people in the room were distracted with their VR devices. Zuckerberg addressed virtual reality in general and Oculus, its VR tech acquisition, in particular. Oculus is Samsung’s partner for VR technology.
This is a game-changer for Samsung. Facebook has chosen virtual reality as its next major platform. Facebook will be the next social network for virtual reality apps. By agreeing to attend the Samsung presentation, Zuckerberg all but endorsed the Korean company.
The combination of the largest social media platform and the world’s top smartphone maker is powerful. Their alliance could make virtual reality more accessible. Samsung will offer Oculus headsets using Samsung Gear VR as standard to anybody pre-ordering an S7 or S7 Edge.
Samsung and Facebook have a good opportunity going here. Zuckerberg said VR experiences on smaller devices would increase thanks to the spread of 5G, allowing people to live-stream with “in-retina quality display.”
Moreover, “Video in 2016 is probably as big a shift in the way that people are going to share and consume what’s going in the world around them as mobile was for how people shared experiences with one another in 2012,” said Zuckerberg, who noted that “Facebook users watch 100 million hours of video per day.” (Source: “Facebook is going VR, with over 1m 360 degree videos consumed every day,” The Drum, February 22, 2016.)
The one shortcoming is that Samsung headsets are not compatible with other “Android” devices. Tim Cook, Apple’s boss, has expressed interest in this technology, and The Financial Times said that several hundred people are secretly working on a VR project. (Source: “Apple VR Project,” MacRumors, January 26, 2016.)
But whereas Samsung is ready to go to market, Apple is playing catch-up.