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Frail Apple Inc. (AAPL) and Samsung Leave Door Wide Open For Microsoft Surface Phone

Apple Inc. (NASADAQ:AAPL)

Apple Inc. (NASDAQ:AAPL) might get a start ahead of Samsung in the 2017 smartphone market after the latter revealed that its Galaxy S8 won’t debut at the Mobile World Congress which begines on Feb 27. The firm is already working on the iPhone 8 and rumors suggest that the device will be enclosed in glass while sporting an OLED screen that is more resistant to damage. There are also hints that Tim Cook might do away with the Home Button on the iPhone 8.

Apple and Samsung are the biggest warring parties in the global smartphone market. Apple fights for iOS market share with its iPhone and Samsung largely leads the charge for the Android ecosystem with its Galaxy ‘S’ smartphones. Microsoft (NASDAQ:MSFT) stands at a distant third behind iOS and Android with its line of Lumia phones on Windows Mobile. However, Microsoft is keeping quiet about its plans to build and launch the rumored Surface Phone; hence, we don’t yet know how it will fare in the market this year.

Here’s why Samsung is delaying the S8

Samsung is delaying the launch of its Galaxy S8 in order to avoid the repeat of the infamous fires that plagued its Note 7 in 2016. The firm got tons of bad press in 2016 when reports of exploding Note 7 devices filled the media. Samsung is yet to recover from the bad press, the hilarious memes about burning Note 7 are still viral, and the firm lost about $5.3B in operating profit because of the fires.

The Korean firm has laid the blame of the Note 7 fires on the doorstep of the suppliers who provided the batteries used in the Note 7. The firm however accepts the blame and it won’t take legal action against the suppliers. Yet, Samsung might still be a long way off from regaining the trust of consumers. The firm says it is yet to decide on whether to reuse parts in the recovered Note 7s or resell any recalled phones. However, it is unlikely that consumers will be willing to buy the S8 if it is made with parts from the ‘cursed’ Note 7.

Koh Dong-jin, Samsung’s mobile chief observes that the firm has learnt its lessons in the Note 7 fires that that “the lessons of this incident are deeply reflected in our culture and process,” Koh also revealed that the firm chose to delay the launch of the S8 in order to fully implements its 8-point battery check system. In his words, “Samsung Electronics will be working hard to regain consumer trust.”

Can Microsoft leverage Samsung’s weakness to enter the 2017 smartphone market?

Apple iPhone 8 Concept

Apple Inc. (NASDAQ:AAPL) has an incredible opportunity to consolidate its lead in the global smartphone market now that Samsung is facing headwinds in regaining consumer trust.

An ‘Insanely Great’ iPhone 8 will make the cross-platform switch from Android OS to iOS easier for most people if the iPhone 8 comes to the market ahead of the S8. The problem however is that seem to have lost its innovative side and it only brings ‘marginal’ improvement to each new model of iPhone.

The lack of innovation at Apple and bad reputation at Samsung could work out in Microsoft (NASDAQ:MSFT) ‘s favor if the Richmond firm can repeat its success with the Surface Pro, Surface Book, Surface Studio, and Surface Dial in the rumored Surface Phone. We can only wait and hope that Microsoft doesn’t miss the opportunity to spring a surprise comeback in the smartphone market.

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Victor Alagbe

Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.
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