Tech giants Apple (NASDAQ:AAPL) and Samsung (DE:SSU) have long had an adversarial relationship. These two have represented what amounts to the two biggest players in the mobile device space, and Samsung’s other electronics have allowed it to stay in the fray against Apple quite well. But now, Apple’s latest release of an AI-driven phone has Samsung planning a similar release. Can Samsung compete effectively in this new battleground? Or will Apple’s first-mover advantage remain in place for some time to come?
The best place to start looking here is at the different AI systems that Apple and Samsung are bringing to the table. Samsung recently rolled out a set of Galaxy smartphones that would pack built-in AI tools, starting with translation software that covers 13 languages and 17 dialects. It even saves language settings for easier use. Then, Samsung also brought out in-app image searches, allowing users to basically circle a thing they want to find out more about—whether it’s a chunk of text or a picture—and have that automatically searched for. Photo editing tools also get in on the action.
Apple, meanwhile, might be pushing the envelope just a little harder. Its AI toolset will feature improvements to Siri, a set of animated avatars, and even its own chatbot known as “Apple GPT.” It’s also delivering what it calls “LLM in a Flash.” LLMs are Large Language Models or one of the major underpinnings of AI technology. LLM in a Flash, reports note, can help drive development in generative AI tools, which means Apple may ultimately have the means to create some of those amazing things we hear about in AI. This could include a song about something or a movie that has the particular elements we want to see.
But Can They Compete?
There is no doubt that both sides have the gee-whiz factor here, that certain gasping, childlike wonder that occurs when we first see a new technology. But where things get interesting is in terms of how they can compete. And interestingly, that question may not be necessary. The two are such radically different propositions that they may never actually compete at all.
Samsung’s AI gear is immediately useful. But let’s be frank: for the most part, it’s essentially just a new version of old tools. It’s a search engine that’s a little stronger. It’s a language translator that’s a little better and works on the fly. It’s a collection of things that work right now. Apple, meanwhile, is more aspirational. While it certainly has things of immediate impact today, like the Apple GPT and the animated avatars, its focus seems to be more on where Apple could be tomorrow, at the forefront of generative AI.
Thus, we have two clear and largely separate markets. Samsung for the things people want and need right now, and Apple for the things we’re likely going to want and need tomorrow. The idea that historically loyal customers would leave their favorite brand seems unlikely here. Apple users will wait until Apple’s hardware can do everything Samsung does and then some. Meanwhile, Samsung users will stick with their old friend, take advantage of the new features, and wonder how many more versions it will take to match up to Apple.
Is Apple a Good Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 24 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 40.09% rally in its share price over the past year, the average AAPL price target of $203.89 per share implies 7.96% upside potential.
