For Samsung in U.S., One Win and One Loss

Samsung’s new Galaxy S III has had such runaway sales success as it launches in the United States that it has threatens the Apple (NASDAQ: AAPL) iPhone 4S as the premier smartphone in the market. Just as Samsung introduces the product, Apple has effectively blocked the import of Samsung’s Galaxy Tab 10.1. A court rejected a new appeal of the decision, which has hurt, perhaps irreparably, Samsung’s ability to attack the Apple iPad in America.

Most people will see the two different paths the Samsung products have taken as an example of how the market shares of tablets and smartphones will be determined largely by the courts. But the Galaxy S III also shows that the best technology can win, if left to compete on its own.

The roaring success of the Galaxy S III came quickly and unexpectedly. No Samsung smartphone has been considered competition to the Apple iPhone before. Samsung’s use of the Google (NASDAQ: GOOG) Android OS left it behind in software features. The lack of products from Google’s app store, particularly compared to Apple’s, also has been a drawback. But the Galaxy S III has processing power, advanced software and a design that made it a colossal success in the UK. Early U.S. orders have topped even wild expectations.

It is reasonable to think that Apple would be less keen to challenge Samsung’s products on an intellectual property basis, if the Samsung products were not, in its view, a major threat. Apple has challenged many competitors’ products in the courts before. And it is with legal battles in a number of the world’s largest countries that Apple races to keep Samsung products out of the hands of consumers.

Samsung’s products have caught Apple flat-footed as each vies for the highest end of the smartphone and tablet PC markets. No matter how the early court decisions come down, products like the Galaxy S III have made the U.S. giant worry, and for good reason.

Douglas A. McIntyre