In ‘things that make you go hmm’ news, Samsung stock is as high as it’s ever been even though Note 7s are still exploding. I don’t mean in sales, I mean actually exploding.
This is one of the most interesting financial based posts you may ever read. The majority of them involve zero fires, after all.
What’s the deal with the persistent surge in Samsung’s market value? Is it in spite of the Note 7s? Are they literally so hot they’re blowing up?
Let’s take a closer look at what we know about the Note 7 and Samsung’s success in the market.
It Isn’t All About The Note 7
Basically, the reason for the stock success comes down to diversification. Phone sales are important, but Samsung has other irons in the tech fire. Two that are helping them out significantly right now are display and semiconductors.
Samsung leads the market in OLED display screens. This tech is more advanced than LCD screens and appears to be the wave of the future. In the first quarter of 2016, Samsung controlled 95% of the OLED screen market. Demand is expected to increase, and that’s something investors like to hear.
Additionally, Samsung leads the pack in the flash memory department as well. Flash memory comes into play when the power to the device is cut. It conserves data.
This is a pretty attractive feature to mobile device users. Battery life and data conservation are two of the most crucial components of a top selling smartphone.
Samsung released the first 3D NAND chip in 2013 and established themselves in the area ahead of Intel and Micron.
The future looks so bright for Samsung based on these components that investors believe Samsung’s market cap is lower than it ought to be. Figures speculated are a 30 to 70 percent undervaluing.
The Tale of the Exploding Phones- Note 7s Blow Up
The Note 7 was supposed to be a big hit for Samsung. Instead, reports of battery issues that cause the units to catch fire are rampant. There are also safety issues with some of the replacement phones.
The company has confirmed that they’ve made production changes. They are actively trying to reassure consumers that the Note 7 is safe. Samsung did not comment, however, on reports of replacement phones catching fire.
There is a lot of bad PR associated with these defective devices. Videos and news reports of Note 7s blowing up or catching fire have gone viral. Samsung has issued assurances along the way but they’re far less sensational than images of combusting phones.
Market Shares Dropped Before Recovering
It isn’t true that exploding phones had no impact on Samsung’s market performance, however. Initially, there was a dip. The company was able to recover because of their hands in other technological pies.
Those who are involved in the stock market will obviously find all of this news interesting, but regular consumes have a dog in the fight as well. Not only is Samsung’s success driving new competitive innovations, but their strength is evidence that the company is here to stay in the mobile market.
Lovers of Samsung phones can rejoice, but may want to wait until the Note 7s are officially declared safe before running out to get one. That should be fairly easy to do, since all of the major news sources are keeping up to date on the story.
Samsung’s Future And What It Means For Consumers
There appears to be a lot to look forward to for fans of the Samsung product line. This is especially encouraging since there is a new iPad Pro and maybe even an iPad Mini Pro coming in Spring of 2017.
Samsung is ready to compete.
Additionally, Samsung’s acquisition of Viv Labs opens new doors in AI functionality for their product line. The company is innovating and looking to stand alone in the mobile device market