Apple Inc. (AAPL), Google Inc (GOOG): Does Samsung Think Smartphone Hardware Is Becoming Irrelevant?

Forget the past
In many ways, it’s almost as if Samsung believes that smartphone hardware is becoming irrelevant, and that software is taking the driver’s seat.

Miloseski’s comments are indicative of an important shift in Samsung’s broader strategy, since the company has historically been a commoditized hardware vendor. Samsung is fully aware that hardware companies tend to face slim margins due to intense price competition, and it is very clearly trying to expand into software differentiation by adding a plethora of new features.

Samsung doesn’t want to have to rely on Google Inc (NASDAQ:GOOG) forever, even as right now their fates are inextricably linked in the smartphone market.

Having it both ways
Ultimately, the truth lies somewhere between the extremes. Specifically within the higher end market for flagship devices, consumers expect both hardware and software to be premium. Quality software in lackluster hardware may suffice in the low-end and mid-range market segments, but buyers paying top dollar are going to have top-notch demands.

That’s why investors were disappointed with the Galaxy S4, because rivals are emphasizing hardware innovation as well as software innovation, while it seems that Samsung is only focusing on the latter at the expense of the former.

The article Does Samsung Think Smartphone Hardware Is Becoming Irrelevant? originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.