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Samsung's New Flagship in Latest Phase of Apple Battle

Samsung's New Flagship in Latest Phase of Apple Battle

By Jungah Lee, Selina Wang, Nate Lanxon, Bloomberg | Updated: 22 February 2016 23:37 IST

Samsung Electronics Co. showed off new Galaxy S7 smartphones featuring upgraded components and the return of a popular feature, in the latest attempt to breathe life into its premium line and wrest ascendancy back from Apple Inc.

The S7 sports 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 the new phones 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.

(Also see: Samsung Galaxy S7 full specifications)

Samsung's efforts to win back customers from Apple and Chinese vendors saw it keep the form and shape of last year's models while fixing its shortcomings amid a weakening global market for smartphones. With earnings sliding 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.

(Also see: Samsung Galaxy S7 Edge full specifications)

"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. It is "still growing," he said, "but there is much more than just a phone that you're holding in your hands. 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."

(Also see: Samsung Galaxy S7 and Galaxy S7 Edge in Pictures)

Samsung abandoned removable batteries and a memory card slot from its marquee phone last year as it sought to make its devices thinner and use more premium materials such as metal casings, like Apple does. 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.

"A very important aspect of using your phone throughout the whole day is the battery and the performance," said Ayme. "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."

Investors are keeping an eye on the smartphone's public unveiling at the Mobile World Congress in Barcelona, 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.

(Also see: LG G5 full specifications)

The Galaxy S7 "should provide a point of inflection for the share price," Soh Hyun Cheol, a Seoul-based analyst at Shinhan Investment Corp., wrote after Samsung reported disappointing quarterly earnings last month. Longer term, the company is "in need of innovative products."

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 Wells Fargo and TD Bank in North America to the list of partners for its mobile payments service. The platform will be rolled out in China next month.

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 globally on March 11, 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.

(Also see: MWC 2016: Samsung, LG Improve Smartphone Cameras, Turn to Virtual Reality)

Samsung is also pushing new peripheral devices, including a spherical camera that can be connected to the S7.

The Gear 360 features two back-to-back fisheye lenses that each can capture a 180-degree image that can be streamed to the S7, earlier S6 models and the Note 5. Samsung has been offering more wearable or portable electronics products that can be paired with its phones and moving up its product releases as it struggles to keep Apple at bay.

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.

Ayme says this, coupled with the Samsung's S7, Gear 360 camera and Gear VR headset, gives consumers a "full ecosystem" of virtual reality. "Enabling users to create their own 360 content rather than just counting on it becoming available," he says, creates a "time for expansion" for the industry. "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.

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.Its shares have declined 5.6 percent so far this year after dropping 5.1 percent in 2015.

About half of the S7 phones will run on Samsung's own Exynos 8 processors while the remaining half will use Qualcomm's Snapdragon 820 chips after Samsung turned away from the US chipmaker last year, people close to the matter said in January.

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.

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Further reading: Apple, Facebook, Galaxy S7, Galaxy S7 Edge, Gear 360, Gear VR, LG, LG G5, MWC, MWC 2016, Mobiles, Samsung, Samsung Galaxy, Samsung Galaxy S7, Samsung Galaxy S7 Edge, Samsung Pay, Wearables, Xiaomi, YouTube

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