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Which is a Better Buy - Apple's iPhone 7 or Samsung S8?

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The global smartphone market is dominated by Apple (AAPL - Free Report) and Samsung Electronics . Currently, the smartphone space is seeing a lot of activity as Samsung’s Galaxy S8 and S8+ have been unveiled and will make it to store shelves on Apr 21. Samsung’s latest edition phones have been big hit with critics.

Though iPhone 7 and 7 Plus have been around since September last year, Samsung phones have just been launched. Samsung started taking pre-orders from Mar 30, 2016.

Which is a Better Phone?

The launch of iPhone 8 (dubbed as a super cycle) is still long time away, which means iPhone 7 and Samsung’s S8 are the two most popular buys at this point of time, say analysts. Let’s compare and find out which is a better phone.

Looks/Design/Colors: Per media reports, the S8 phone has edge-to-edge curved display with 5.8 inch screen (S8+ has a 6.2 inch display). This is because the borders are considerably reduced due to the absence of the home button, which has gone virtual. Samsung calls this the “infinity display”. Moreover, these phones have Super AMOLED capacitive touch screens. Justin Denison, the vice president of product strategy of Samsung Electronics America, was quoted saying that S8 “will fundamentally change the way you use your phone by giving you more screen.” The display resolution is 1440 x 2960 pixels (~570 ppi pixel density). The phones have a glass and aluminum-frame and are available in five colors— black, gold, blue silver and gray.

On the other hand, Apple’s iPhone 7 features a 4.7 inch touch screen display with a resolution of 750 x 1334 pixels (~326 ppi pixel density). The phone has an LED-backlit IPS LCD touchscreen. For an edge-to-edge curved display and an AMOLED touch screen, we will have to wait until iPhone 8. Analysts observe that the general perception about this phone’s similarity with its predecessor has been a case of disappointment for users. Apple has kept the external design pretty much unchanged for its flagship offering since the last three editions. The back is aluminum-built and the phones come in five colors—black, jet black, gold, rose gold and silver.

Differentiating Features: S8’s Dex, reportedly touted its biggest improvement, enables users to connect peripherals like mouse, keyboard and monitor with the smartphone and use it like a desktop. In addition, the phone is compatible with a Gear VR headset. Furthermore, reports add that S8 has kept the headphone jack intact while allowing wireless charging. It also has facial recognition and Iris scanner features along with a fingerprint sensor. S8 will have a Siri-like voice assistant called Bixby which debuts with the S8 phones and will also gradually be available on other Samsung devices.  Earlier, Samsung was quoted saying "Bixby is at the heart of our software and services evolution as a company."

On the other hand, iPhone 7’s most noticeable feature, the removal of the headphone jack met with mixed reactions. With the removal, the company is trying to promote its wireless headphones, Air Pods. The phone, unlike S8, neither supports VR headsets nor a PC dock. Apple has only the fingerprint sensor technology.

OS and Processor: Samsung S8 has an Android OS and v7.0, while iPhone 7 runs on iOS 10. iPhone 7 can be upgraded to iOS 10.3. S8 runs on Snapdragon Qualcomm octa-core processor while iPhone 7 runs on A10 Fusion Chip that is claimed to be twice as fast as that in iPhone 6. Apparently, both the processors are almost similar in performance. 

Camera: Not much difference is noticeable as far as camera mega pixel is concerned. S8 has an 8MP front camera while the rear camera is 12 mega pixels with f/1.7 aperture. On the other hand, iPhone 7 has a 7 MP front camera while the rear camera is 12 mega pixels with f/1.8 aperture. Both phones support optical image stabilization.

Battery: Analysts point out that it is too early to comment on S8’s battery life as it is determined by various real life factors. At present, S8 has a much higher battery capacity (3,000mAh) compared with iPhone 7 (1,960mAh).

Memory/Storage: Reportedly, S8 offers a single storage option of 64 GB, unlike iPhone 7 which comes with three different storage options (32GB, 128GB and 256 GB). However, S8 enables usage of microSD card, which is not possible in an iPhone 7. S8 has a 4GB RAM while iPhone 7 has a 2GB RAM.

Price Point: Finally, it is the price that ultimately is of utmost importance to buyers. S8 has been priced steeply at $750 while iPhone 7’s starting price is a notch lower at $650. 

Bottom Line

Android users will definitely find S8 a great phone. But for Apple loyalists, switching to Android might not be a good option and so iPhone 7 might be their best option. It depends entirely on preference.

Furthermore, Apple has good news for its fans as it gears up to launch iPhone 8. It is specially being launched to mark the tenth anniversary of the first iPhone.The phone is rumored to have features like a glass body, a dual curved edge-to-edge OLED display with a built-in Touch ID sensor, wireless charging and higher storage options. In short, Apple is expected to make a huge technological advancement with this new edition. However, buyers will need to be patient as the new phone is unlikely to be out before September this year.

Zacks Rank & Stock Price Movement

At present, Apple has a Zacks Rank #2 (Buy). We note that since the launch of iPhone 7 on Sep 16, Apple stock has returned 37.33% compared with the S&P 500’s gain of 9.88%.

Other Stocks to Consider

Other stocks in the wider technology space include Tech Data Corp and MeetMe, Inc. . While Tech Data sports a Zacks Rank #1 (Strong Buy), MeetMe carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, Tech Data and MeetMe have yielded positive average earnings surprises of 8.73% and 36.07%, respectively.

Want to hear more about Samsung's latest addition to the Galaxy family? Check out this episode of our exclusive tech-focused podcast, the Zacks Tech Talk Tuesday:

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