Samsung Gets the Jump on the Competition

One of the biggest news items on Tuesday from the CTIA Wireless 2008 show was Sprint's (S - commentary - Cramer's Take) announcement of a massive $100 million promotional push for the new Samsung Instinct, a relatively light 4.4-ounce phone featuring a huge 3.1-inch touch display. This is just the latest example of how rapidly the high-end phone market is shifting to jumbo display models -- a trend that was kicked off by Apple's (AAPL - commentary - Cramer's Take) iPhone last June.

There is little doubt that Samsung is poised to gain market share in the first half of 2008, but it is happening in an environment that may be turning hostile to high-end specialists like Sony Ericsson and Samsung.

However, while Samsung has scaled back expectations a bit, it should be better positioned than its competitors for rocky times, and its relative buoyancy is likely to aid Qualcomm (QCOM - commentary - Cramer's Take) in a challenging time period for high-end phones.

Attacking the iPhone

Samsung Instinct's GSM sibling model -- the Samsung F490 -- is currently one of the hottest new models in Europe. At just 105 grams, the F490 is nearly 25% lighter than the iPhone despite featuring a 5-megapixel camera and HSDPA support. It's one of the lightest big-display handsets in the market, and Vodafone (VOD - commentary - Cramer's Take) is rumored to be preparing a major spring push for it. The plan seems designed to deliver a second-quarter coup de grace to the iPhone, which is struggling in Europe ahead of its 3G upgrade.

Verizon is already prepping another sibling of this platform -- the Samsung Glyde -- as a part of its iPhone counterattack. Samsung is now benefiting from the simultaneous plans of several major operators to undermine the iPhone ahead of the summer launch of the 3G/GPS upgrade. Some of the models lack the 5-megapixel camera -- but most of them feature at least advanced 3G support of HSDPA or EV-DO.

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At time of publication, Kuittinen had no positions in the stocks mentioned, although holdings can change at any time.

Tero Kuittinen is managing director and senior analyst for Avian Securities, a brokerage firm specializing in technology companies. Although Kuittinen is an employee of Avian Securities the statements above are being made in Kuittinen's personal capacity and are in no way are the statements of Avian Securities, nor attributable to the company. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Kuittinen appreciates your feedback; click here to send an email.