Samsung Gears Up for Apple's iPhone 7 With the Note 7

By Markets Fool.com

Pop quiz: Do the following quotes refer to smartphone giant Apple (NASDAQ: AAPL) or Samsung (NASDAQOTH: SSNLF)?

Continue Reading Below

  • "The Best Smartphone You Can Buy Right Now" -- The Wall Street Journal, March 8, 2016
  • "Head of the Smartphone Class" -- WSJ, Dec. 1, 2015

If you're guessing the answer isn't what most might expect, you're spot-on. Both quotes refer to South Korean giant Samsung's past two editions of its flagship smartphones.

Earlier this week, Samsung launched the latest edition of its Note smartphone lineup in a likely attempt to extend its momentum ahead of what will probably be the year's most highly anticipated smartphone launch -- the Apple iPhone 7, expected to roll out in mid-September. Let's review whether Samsung's Note 7 seems up to the task.

Note 7: Another great Samsung smartphone

Samsung opted to skip from last year's Note 5 straight to the Note 7 this year, probably in a bid to simplify the product numbers across its Galaxy and Note high-end handset families.

Continue Reading Below

In terms of family resemblances go, Samsung's Note 7 is something like the fraternal twin of the Galaxy S7 Edge, the device that was the subject of one of the introductory quotes. In fact, the Note 7 was reportedly built using the same curved screen and Edge software that powers the Edge S7.

Image source: Samsung.

The two devices also share the same 5-megapixel front-facing and 12-megapixel rear-facing cameras. The same powerhouse Qualcomm Snapdragon 820 processor also powers them, though Samsung will purportedly use its own Exynos-branded processors in some geographies.

The Note 7 enjoys a slightly larger screen size over the Galaxy S7 Edge -- 5.7 inches, versus 5.5 -- though the difference will be negligible to the average user. The Note 7 and Galaxy S7 also share the same waterproof exterior that Samsung implemented to widespread praise.

The biggest difference between the two is the Note 7's S-Pen stylus. Though it appears to largely share the core functionality of the Note 5, the Note 7 does come with a few new tricks, including tap magnification and GIF-making capabilities. The Note 7 also comes with a new Iris scanner that allows users to unlock their phones completely hands-free.

Price is another key difference. Thanks to some new features and the added component cost of the S-Pen, the standard edition of the Note 7 retails at $849, whereas the Galaxy S7 starts $100 cheaper at $749.

Overall, the Note appears to be another great iteration of Samsung's successful smartphone lineup. So what does this do for the competitive balance ahead of Apple's iPhone 7 launch later this year?

Apple versus Samsung

Heading toward the holiday months, Samsung enjoys an edge over Apple with its smartphone lineup. The wild card is what surprises Apple could have up its sleeve.

One downside of Apple's historic size and scale -- particularly in regard to its iPhone business, its largest segment by far -- is that details of its device plans tend to leak more easily than in its days as a smaller, nimbler company. The consensus so far, bearing in mind that they are just rumors at this point, is that Apple's forthcoming iPhone 7 will offer only moderate improvements over its predecessor.

Should that be the case, Samsung could steal some market share from Apple at the high end of the smartphone market. It will bear watching to see whether Apple's ironclad ecosystem can help insulate it from Samsung's compelling new devices.

Apple reportedly has a sweeping iPhone redesign in the works for fall 2017, the device's 10th anniversary. Assuming the rumors are correct, consumers could opt to wait for this potentially game-changing iPhone next year.

Either way, the competitive balance in the most profitable part of the smartphone market appears tilted in Samsung's favor more than at any other time in recent memory. Especially if Apple lays an egg with this year's iPhone, the next year will be a fascinating one to watch in this important tech market.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

Andrew Tonner owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.