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Apple’s next big threat

There is a growing perception that Samsung has successfully copied its way into become a meaningful threat to Apple (NASDAQ: AAPL) in the smartphone market, in part due to the popularity of the company’s Galaxy S series of devices. The South Korean conglomerate recently announced that it has crossed the threshold of 100 million units in channel shipments over the three generations.

That figure still pales in comparison to the number of iPhones that Apple sells, but when you include all of the other smartphone models that Samsung sells, including phablets like the Galaxy Note and lower-end devices in unsubsidized emerging markets, then Samsung comes out on top with a healthy lead. Samsung’s official marketing tag line for its Galaxy brand is “The Next Big Thing.” Is the next big threat to Apple imminent?

“The Next Big Thing” keeps getting bigger
According to a report from Samsung rumor site SamMobile separately confirmed by The Verge, Sammy is preparing to launch the Galaxy S IV on March 14 — less than a month away. That will be after Mobile World Congress ends, which is where some had thought the device would be unveiled.

The Galaxy S IV is expected to continue pushing the envelope with sheer size, featuring a 5-inch AMOLED display.

Model Display Size
Galaxy S 4-inch
Galaxy S II 4.3-inch
Galaxy S III 4.8-inch
Galaxy S IV 5-inch*

Sources: Samsung and SamMobile. *Rumored.

Other rumored specs include an 8-core Exynos 5 Octa processor and 13-megapixel image sensor. Naturally, the new flagship will run on the latest version of Google (NASDAQ: GOOG) Android, in this case 4.2.2 Jelly Bean.

Core talk
The Exynos 5 Octa chip inside is notable because it will be among the first to market featuring ARM (NASDAQ: ARMH) Cortex A15 cores. Samsung’s $249 Chromebook that launched last October was its first device using an Exynos 5 processor, but the Galaxy S IV will be Samsung’s first smartphone carrying a processor of this caliber. This chip is based on ARM’s big.LITTLE technology and combines the performance of Cortex A15 cores with the energy efficiency of Cortex A7 cores. In the Exynos 5 Octa, there are four of each of these two types of cores.

In order to compete on this front, Apple is rumored to be rebuilding iOS in order to better support additional processing cores and future versions of the operating system could handle up to 8 cores also. Apple now uses custom “Swift” cores in that are on par in performance with Cortex A15 cores.

Foolish takeaway
Apple and Samsung represent the two extremes of product strategy, and both are successfully executing their respective philosophies. Apple has always favored product depth over breadth, and has thus far only released one iPhone model per year. In contrast, Samsung is the exact opposite and chooses to focus heavily on breadth over depth, offering a wide range of devices with nearly every imaginable combination of display size, price point, and overall quality.

Combined, the two vendors gobbled up an incredible 103% of the smartphone industry’s operating profits in 2012, according to estimates from Canaccord Genuity. That figure exceeds 100% only because of operating losses at rivals like BlackBerry, Nokia, and Google’s Motorola, which weigh on the overall sector.

Foolish takeaway
The Galaxy S IV will turn up the heat on Apple along with other Android OEMs, many of which have fallen on hard times during Samsung’s rise. Even as Samsung has copied Apple to success, the company is not immune to the same strategy. Fellow South Korean OEM LG has just unveiled its Optimus G Pro phablet, which looks almost identical to the Galaxy Note II and also carries a 5.5-inch display.

Hopefully Apple ends up accelerating its product cycle and releases the next iPhone over the summer.

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The Motley Fool’s purpose is to help the world invest, better. Enter your email address in the box at top right for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

A version of this article, written by Evan Niu, CFA, originally appeared on fool.com.

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