Apple Inc. (AAPL), Samsung (SSNLF): Good Reasons to Short the Smartphone Industry.

Believe it or not, Samsung is also developing an alternative open-source operating system (OS). The Korean company has partnered with Intel Corporation (NASDAQ:INTC) to compete with Google Inc (NASDAQ:GOOG)’s Android (the world leader with a market share of 68.8%) and Apple’s iOS. This is probably a response to Google’s acquisition of Motorola Mobility, which can turn into a competitor any time soon. Even if the move might make some sense for Samsung in the short term, it’s a nonsense move in the long term. Developing software takes a huge amount of resources, and bringing another OS into the arena looks as useless (for shareholders) as Google’s investment in Motorola Mobility.

Source: IDC.

Even if Samsung (NASDAQOTH:SSNLF)’s strategy seems to be working well, as its market share grew 11.3% between 2011 and 2012, it is putting the industry’s profitability level in danger. The three reasons I listed above are enough to make me a pessimist in the sector. I think great times are coming for consumers, but the consequences for smartphone makers are not going to be as great. After all, innovation brings change which is great for the world, but is usually bad for investor’s pockets. Maybe you should buy a new phone and short its maker!

The article Good Reasons to Short the Smartphone Industry. originally appeared on Fool.com and is written by Federico Zaldua.

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