Samsung Beaten by Sony Corporation (ADR) (SNE) at Its Own Game

Samsung’s downgrades are one issue. Another issue I have with the company’s products is the lack of ecosystem supporting them. Android is a partial ecosystem that doesn’t really have that much cross-compatibility with Windows computers. In other words, every application that is purchased in the Android store won’t be carried over to your Windows computer.

Going forward, I find it highly doubtful that people will stop using Windows operating systems. Microsoft Word, Excel and PowerPoint are how most office and school work gets done in the world. People are trained to use these programs, so there’s a factor of stickiness that is keeping Android from becoming a fully independent ecosystem that can appeal to both the work and play crowd.

Consider Apple iOS

What’s even more troublesome is that Microsoft Corporation (NASDAQ:MSFT) has basically pushed Office 365 onto the Mac OS X, and iOS ecosystem. Given enough time, Office 365 will be made available for both the iPad and iPad mini. Everyone in both the Apple and Microsoft Corporation (NASDAQ:MSFT) ecosystem will be able to work and play. On the other hand, Samsung, Sony, HTC, LG and the rest get left out, though I think Sony Corporation (ADR) (NYSE:SNE) will be fine. Sony’s smartphone has a lot of features differentiating it.

According to rumors, Apple has plans of releasing a lower-end phone model. No one knows whether the iPhone 5S will be the low-end model, or the iPhone 6 will be the low-end model. Apple has a lot of pent-up growth ahead of it as it will be its very first low-end device. The manufacturing of it will be heavily standardized, which will give it large profit margins compared to Samsung. Analysts on a consensus basis anticipate Apple to grow earnings at a 20.88% rate over the next five years.

Conclusion

It is time to dump Samsung and buy Sony Corporation (ADR) (NYSE:SNE). After all, Sony has a lot of pent-up growth ahead of it and has a strong enough product line-up to make it a serious contender against other phones in the Android ecosystem.

I also believe that Apple will grow exponentially if the company releases a low-end phone. The low-end phone will be the company’s first attempt at maximizing its profit potential in emerging markets.

The article Samsung Beaten by Sony at Its Own Game originally appeared on Fool.com and is written by Alexander Cho.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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