Samsung Opens New Phase in Apple Battle With Galaxy S7

Samsung Takes On Apple With New Galaxy S7
  • Removable memory returns while battery remains locked in
  • Galaxy S7 to hit stores a month earlier than its predecessor

Samsung Electronics Co. showed off virtual reality hardware alongside its latest Galaxy S7 smartphones, in its latest attempt to breathe life into its premium line and wrest ascendancy back from Apple Inc.

The new phones go on sale on March 11 sporting a 5.1-inch screen using its own Exynos or Qualcomm Inc. processors, with a larger 5.5-inch Edge model equipped with the same kind of wraparound display the company debuted last year. While they look almost identical to the S6 line, Samsung is bringing back a memory-card slot and adding a longer-life battery after the absence of a removable power unit alienated fans last year.


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Samsung’s efforts to win back customers saw it keep the form and shape of last year’s models while fixing its shortcomings and touting their potential role in the coming virtual reality boom. With earnings sliding in a stalling smartphone market and the shares battered by three straight annual declines, South Korea’s biggest company needs a hit product after the S6 failed to set the records that had been predicted.

“Samsung’s trying to shift consumers’ sights to bundled products, such as VR headsets and a 360 degree camera, which would help it keep the smartphone margin from decline,” Lee Jae Yun, an analyst at Yuanta Securities Co., said in Seoul. “This is a good try but Samsung can’t help slashing the prices of new premium smartphones to keep its market share. ”

Reduced Drain

At the World Mobile Congress in Barcelona, Samsung took the wraps off a 360-degree camera designed to work with the S7. Ian Fogg, an analyst with IHS Technology, called the Gear 360 accessory a “halo” product that will help boost sales of the smartphone in a decelerating global market.

“The market for the smartphone is obviously slowing down a little bit,” Jean-Daniel Ayme, vice president of European telecom operations at Samsung, said in an interview. “When you’re using one of these new devices, this is more than a phone, this is your camera, your MP3 player, your TV, your recorder, it’s everything and more, and more is coming.”

Samsung abandoned removable batteries and a memory card slot from its marquee phone last year as it sought to make its devices thinner. The move backfired as it eliminated two key ways in which the company’s devices were differentiated from iPhones. Samsung cut prices on the S6 smartphones in July last year, just three months after launch. Ayme said the company has managed to crack the power issue.

LG Electronics Inc. G5 smartphones.
LG Electronics Inc. G5 smartphones.
Source: LG Electronics Inc.

“This phone is more powerful than any phone we have launched in the past, but it also has optimized software that will reduce the battery drain, and we have managed to put a larger battery in a smaller package,” Ayme said. 

Heads Up

Investors are keeping an eye on the smartphone’s public unveiling, and on its ability to stand out from a thicket of devices -- from LG Electronics Inc.’s G5 and Xiaomi Corp.’s Mi 5 -- that are being unveiled in Spain. LG’s 5.3-inch smartphone will go on sale globally as early as the end of March, except in Japan, said Woo Ram Chan, vice president of LG’s mobile product planning division.

The stock fell 1.3 percent to close at 1,175,000 won in Seoul. Itsshares have declined about 7 percent so far this year after dropping 5.1 percent in 2015.

QuickTake Samsung

The new S7 models are waterproof for as long as 30 minutes in water 1.5 meters deep and come in gold, silver, white and black. Also included is wireless charging and Marshmallow, the latest version of Google Inc.’s Android operating system.

The Galaxy maker, which is banking on Samsung Pay as another differentiator, added a host of regional banks and credit unions to the list of partners for its mobile payments service. The platform will be rolled out in China next month.

Zero to Hero

Samsung’s codename for the S7 development project was ‘Hero’ while last year’s plan for the S6 adopted the title ‘Zero’ as the company tried to return to the fundamentals in its design.

This year’s models hit the market about a month earlier than the S6 did in 2015. While wireless carriers will decide on prices and calling plans, the S7s will probably be at a similar price level to last year’s device, according to Drew Blackard, director of product marketing at Samsung. Some operators could include a free Gear VR headset with the S7, the company said without elaborating.


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The Gear 360 camera features two back-to-back fisheye lenses that each can capture a 180-degree image and stream it to the S7, earlier S6 models and the Note 5.

Social networks, including Facebook Inc. and Google’s YouTube, recently starting supporting 360-degree videos -- a format used by virtual reality hardware, and which on regular computers and mobile devices allows viewers to dynamically alter the angle they view a scene from.

Shrinking Share

Ayme says this, coupled with the Samsung’s S7, Gear 360 camera and Gear VR headset, gives consumers a full taste of virtual reality, allowing consumers to create their own content rather than waiting for it to become commercially available.

“Something that used to be only accessible to a few people with a lot of knowledge about computing and with very powerful computing engines, is now available to everybody,” he said.

Whether virtual reality will prove an effective selling point remains to be seen. While the South Korean company remains the world’s largest smartphone producer, its global market share fell in 2015 as Apple, Huawei Technologies Co. and Xiaomi Corp. won customers, according to researcher Strategy Analytics Inc.

Samsung last month warned of falling global demand and economic turbulence after its quarterly earnings missed analysts’ estimates.

Samsung, which misread demand for the S6 when it failed to produce enough three-sided screens for the Edge, said it won’t face the same problem this year.

(Company corrects to remove names of specific banks as partners for mobile payments in 11th paragraph.)
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