SAMSUNG RATCHETS UP THE COMPETITION WITH APPLE

Apple (AAPL) has had a significant advantage in the smartphone market for the past few years.  They have roughly 400 stores dedicated to selling their products to consumers, including the iPhone, whereas other smartphone makers have been forced to rely upon the wireless carriers to retail their phones.  However, this is all about to change and Apple shareholders should take special note.

Samsung (SSNGY) recently announced a new partnership with Best Buy (BBY).  This month Samsung will begin to open dedicated mini-stores, The Samsung Experience Shop™, within more than 1,400 Best Buy locations.  At the Samsung Experience Shops, consumers can experience Samsung’s full range of mobile products including smartphones, tablets, laptops, connected cameras and accessories, all in one location. The shops enable consumers to interact with and buy Samsung’s latest mobile products and experience how the devices connect together to enrich their lives.

Select Best Buy stores will have Samsung Smart Service™, which includes dedicated Samsung Experience Consultants™ and Best Buy blue shirt sales associates to assist customers with purchasing and activating mobile products on the carrier of their choice, understanding their device and supporting them throughout the lifecycle of their product. The specially trained Samsung Experience Consultants will assist with product demonstrations, basic product services, Samsung account set up, warranty registration and post purchase support.

“Samsung has been delivering the latest innovation across the consumer electronics category for some time,” said Dale Sohn, president of Samsung Telecommunications America. “With the Samsung Experience Shops, we are ensuring consumers get the most of that innovation by learning how to leverage their mobile devices across our ecosystem of consumer electronics. Consumers will have one place to not only explore and learn about our full portfolio of mobile products, but also the support of a Samsung expert to help with selecting and servicing them. This will truly be a unique mobile shopping experience.”

This partnership represents a win-win situation for both companies as Samsung will end up with more domestic retail locations than Apple currently has and Best Buy, who has been plagued with profitability issues, finds a new market to service.  “We look forward to showcasing Samsung products in the Samsung Experience Shop in all Best Buy and Best Buy Mobile locations. This is part of our Renew Blue transformation strategy – working closely with vendor partners to innovate and drive value, while also updating our stores to focus on growing and profitable categories,” said Shawn Score, head of U.S. Retail for Best Buy. “Our promise to our customers is simple: we’re committed to providing the best value, service and selection. Our partnership with Samsung on the Samsung Experience Shop is another way we’re delivering on that promise.”

This will present Apple with a significant challenge, one that Apple shareholders should watch carefully.