Thursday, July 18, 2013

The virtues I see in Samsung

I can remember when Sony was the name to get. I spent some time working at the Great Indoors in Irvine years ago to try my hand at sales. BTW, you won't find The Great Indoors anywhere. They've long since been closed down. While I was there, I was captivated by the top end Sony Bravia LCD TVs. Their Bravia TVs back in 2006 were fantastic for their time and expensive. Today? That same tech is run of the mill. Most sets can match that experience.

But somehow, Sony lost their mojo. They lost their lead to Samsung and maybe even LG. Most headlines these days are for Samsung in the tech news. And Samsung isn't necessarily the name brand on the products you buy. Their parts are often inside.

For example, inside most iPhones and iPads, you will find Samsung A4 and A5 processors. Samsung also makes the screens for many of those devices. But Samsung no longer makes the screens for Apple. Why? Samsung makes Android phones. Steve Jobs mistakenly believes that Android is a "stolen product" and decided to go nuclear against Android. So Apple sued the lead Android cell phone manufacturer and began in earnest to find new suppliers and terminate all contracts with Samsung. One look at how Apple's stock price has been trending will tell you how that war is going. Very badly for Apple.

Samsung has been innovating in other ways. It is not widely known that Samsung makes disk drives. But these are no ordinary disk drives. They are solid state disk drives. No spinning platter, no moving parts. A typical SSD is about 20 times faster than a traditional spinning platter drive. This kind of speed leads to at least a 62% decrease in boot times for Windows, as tested more than two years ago.

In the past week or so, Samsung has made two more announcements. The first is for a new line of consumer SSD, the 840 EVO series. These 840 EVO drives will double or triple the write speed over the previous version of the 840 model series.

Samsung has also announced released a new enterprise drive that is about 6x faster than the fastest SSD previously announced, or, 3,000MB/s. That is an insane number to hit for hard disk performance. Note that your typical SATA cable won't be big enough to handle the flow of data. No, this baby will require a PCIe slot for maximum throughput. Of course, 3,000MB/s is overkill for a desktop, but if you're running a very fast database for your internet based shopping cart, this should fit the bill.

There is one very interesting aspect to Samsung's business which doesn't get much notice in the press. They don't unilaterally sue others for patent infringement. Apple has sued Samsung. Twice. Apple stock is in decline and they're losing a major supplier.

Microsoft sought and got a patent licensing agreement with Samsung to get them to make a Windows smartphones. The proposition from Microsoft? "Hey, that's a really nice cell phone business you got there. I'd hate for anything bad to happen to it. Look, if you just sign this patent license agreement, the cost is less than the cost of litigation and nobody gets hurt. Once you sign this, you can make Windows Mobile phones and we'll look the other way." Microsoft's stock has been going sideways for years and their market share is rapidly eroding.

Samsung? For the last several years, their stock has been hitting new highs until recently. So what's the problem there? Analysts are worried that Samsung is overwhelming the customer with model choices for smart phones. But their current stock price is trading at over $800 a share, almost double the price for Apple's stock.

I have a Samsung TV. I have a Samsung DVD player. My wife has a Samsung Galaxy S3. I buy their products because Samsung is more interested in innovation than litigation. That is a rather peaceful attitude to have and that is something I want to promote with my purchasing dollars.
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