I'm amused at all these trolls talking about how Apple fans have their feelings hurt by this ad. I actually read the entire topic, and there may have been maybe two or three people who were actually upset by the portrayal of the people in line, and ten times that many talking about there being a massive number of people hurt by it. Everyone else doesn't care, or thinks it's vaguely funny. If you actually read the topic, there is no massive outrage from Apple fans. Mostly, there is confusion.
For my own part, the ad did elicit a couple laughs as I watched it. But, when it was over, I just had to shake my head and wonder what the point was. Eventually, I figured it out. This ad, quite obviously, is not going to win any more Samsung customers. But it's not intended to. It's intended to keep Samsung's customers from looking seriously at the competition. They make a mockery of the competition, give their customers the impression that their devices are desirable by their competitor's customers, and create an alternative narrative to the massive, record sales figures of the new iPhone 4S.
I'm fully aware that Samsung, as a maker and seller of products, is doing quite fine. They're shipping plenty of units, and while their profits aren't as good as Apple's, they're obviously not going out of business either. But, an ad like this shows pretty clearly that Samsung is worried about Apple's successes, and don't want to have their customers with existing Samsung products buy anything other than new Samsung products as their contracts come up.
There's only two reasons to talk about your competitors by name. The first reason is because you're behind, either in the actual numbers, or in acceleration (your competitor is gaining faster than you and you're losing ground). We can debate if this is true or not between Samsung and Apple right now, there are all sorts of metrics to compare to, but seeing as this is business, revenue matters the most, and Apple's profits are better than Samsung's in the market.
The second reason is to elevate yourself, relative to all other players, to put yourself on par with whoever is winning. It's why in a primary race, politicians all talk about whoever is most popular in the polls, and none of the other primary candidates. It's why Pepsi and Coke only talk about Coke and Pepsi, and never RC Cola. This is more of an anti-HTC ad than an anti-Apple ad. They know they're not going to win Apple customers with this ad, but they can elevate themselves to Apple's only true competition.
The reason why you never want to mention your competitors by name is because it sends pretty strong signals about your weak position. Romney only talks about Obama because he's not interested in elevating his competitors, and Apple will never mention Android or Samsung or HTC in any ad they produce. This is a move of desperation by Samsung, a really big sign that they're either losing ground, or fear losing ground. Still, if you are behind, there's only two ways to catch up. Either you present a much better brand/product, or you try to tear down the top brand/product. Some companies are capable of creating the former. Samsung apparently can only do the latter.
So, how effective of an ad it will be, we'll see I guess, but one ad is rarely effective on its own. You need to back it up with a whole campaign before you start winning mindshare. Its effectiveness, however, will not be measured in how many Apple customers it wins over, it'll be measured in how many customers Samsung doesn't lose to Apple, and how many customers it steals from HTC. It's a defensive ad, and one trying to elevate its brand over the other also-rans.
The purpose of the ad is to create a narrative of iPhone users switching en masse to Samsung devices, when the actual truth is that Apple can't keep their product in stock despite the largest manufacturing effort they've ever had to do. The Samsung narrative is false, with Apple's market leading customer satisfaction ratings, but advertising is not about facts, just creating a narrative. Samsung doesn't need to mention anything at all about feature sets or usability, just create an impression of desirability for their own product, even as they inadvertently admit people are willing to line up for hours for the mere chance of getting a product made by Apple.
Apple's narrative will continue to focus on the customer experience, and never mention the competitors. As far as Apple is concerned, there are no competitors. There are phones, and then there are iPhones. Either you have an iPhone, or you have nothing. This is certainly a much better image to present in an advertisement. One could certainly argue that the Android ads usually miss the point entirely, focusing on fancy computer graphics and tech specs and nothing at all that is relevant to the average consumer. The products themselves might be as good or better than the iPhone, but they only care about showing ads with huge robots fighting in some dystopian gladiatorial arena, so regular non-geeks will pick the phone that shows off FaceTime, Siri, the camera, and apps for travel or educational software.
People mention the PC vs. Mac ads as somehow attacking the PC user, and that's not true, but they are actually similar to this Samsung ad. Those were attack ads, aimed at products (not people), and done because the Mac is in a weaker position to Windows. They largely made Mac users feel better about their own purchases, and elevate themselves to Window's sole competitor (sorry, Linux folks). This is what the Samsung ad is trying to do with their own brand. They're just doing it perhaps a bit more mean-spirited, though this too I expect is intentional to generate virality.
TL;DR
Butthurt? Not many. Read the full topic and there's way more people saying there are, than actually people who are.
Funny ad? Sorta. Perhaps unintentionally so, in a few cases, but a decent parody.
Bad ad? Not really, just not aimed at what people think. It's to elevate themselves above HTC and such, not go after Apple.
Sign of a weaker position? Yes. Competitors only go negative when they're behind.
Effective ad? We'll see if they back it up, or if this is just a one-off to get people talking for 15 minutes. And, we'll see their market share in a year. Some people may investigate why the iPhone is so popular. Some baristas may be pissed.
About the whole 4G debate, I don't think it will resonate well with the average customer. I remember a while back there was an article here on MacRumors about a huge percentage of iPhone 4 customers who already believed they had 4G on their phones. So yeah.
And for the screen size debate, I'm really quite happy being able to reach every corner of my phone with my thumb, comfortably without strain. Yes, I could hold it differently, or stretch further, and use a 4", but I'd rather keep the thing portable and easy to use.