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TheStreet Open House

Samsung Has an Innovation Problem -- It's Not Apple

NEW YORK (TheStreet) -- Samsung (SSNLF) gets very favorable treatment from the press in comparison to Apple (AAPL) and it drives Apple bloggers crazy -- justifiably so in my opinion.

John Gruber loves to point out the subtle jabs the mainstream business press regularly loves to take at Apple for seemingly not being able to keep up with the pace of innovation at Samsung.

Samsung has done well over the past five years.

>>Apple iPhone Ad Sets Tone for Smart Home Products in the Pipeline

When the Android open alliance was first announced in 2007, Samsung was one of many Android providers. Now, Ben Evans refers to the Android community as "Samsung and the seven dwarves."

This power has made Google (GOOGL) and Samsung uncomfortable allies at times. In fact, Samsung has played around with the idea of launching its own mobile OS (Tizen). But up until now that effort has yet to gain much traction.

Let's give credit where it's due. Samsung's Galaxy phones have been a hit globally. Its Notes defined the Phablet category and remain extremely popular in Asia. And Samsung is #1 in terms of smartphone market share, according to current estimates, at 31% vs. 15% for Apple.

Perhaps because of all this, Samsung's stock (in Korea) is up 85% in the last five years.

That's good. Mind you, Apple's stock is up 292% over the same period.

But recently there's been a batch of bad news coming out of Samsung. Its CFO implied that Samsung's second-quarter results would miss on profit expectations again.

Samsung's year-over-year profits actually topped out from a growth perspective in the first quarter of 2012. Since then, the quarterly profit has been decelerating annually.

What's going on?

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