Samsung enlists Facebook’s Zuckerberg at unveiling of Galaxy S7, LG shows off modular G5 on eve of Mobile World Congress

Two South Korean companies banking on smartphone recovery but S7 fails to attract much buzz; Facebook CEO invited to discuss virtual reality

PUBLISHED : Monday, 22 February, 2016, 1:01pm
UPDATED : Monday, 22 February, 2016, 5:27pm

Smartphone rivals Samsung Electronics and LG Electronics unveiled their latest flagship devices on the eve of the Mobile World Congress in Barcelona, which starts Monday, as they seek to revive sales momentum and buck slowing industry growth.

In a surprise move, Samsung also brought in Facebook chief executive Mark Zuckerberg to tout the potential of virtual reality, prompting hundreds of people to rush to the stage to record the moment.

READ MORE: Hong Kong and China to drive global demand for smartwatches

Samsung’s new Galaxy S7 and Galaxy S7 Edge devices made a splash when it was revealed they can be submerged at depths of up to 1.5m for 30 minutes. Both devices also accept MicroSD cards with up to 200GB of storage. The company said they will be available for purchase from mid-March.

WATCH: Samsung Galaxy S7 first look at MWC 2016

The two devices also feature new gaming tech and a rear camera better equipped to handle low-light conditions, while stronger batteries mean the Edge can now play up to 15 hours of high-definition video on a single charge, according to media reports.

But both are similar in design to the S6, which left some critics underwhelmed.

“Samsung is awkwardly positioned between Apple and cheaper Chinese brands at the moment,” said Alex Ng, an analyst with China Merchant Securities.

“It cannot justify prices as high as Apple’s, but it can’t be as cost-effective as Chinese brands ... [which] are also now moving up to the premium markets.”

Global smartphone shipments grew just 10.1 per cent in 2015 after jumping 27.6 per cent the previous year, according to data from research firm IDC.

Phone makers face another tough year in 2016 as subdued global growth and persisting currency weakness in key emerging markets sap consumers’ spending power.

A push by Chinese manufacturers to expand overseas amid slowing growth in their domestic market may undercut margins further.

Samsung also showcased a 360-degree camera that can film footage for playback on its Gear VR headset, which Samsung has teamed up with Facebook’s Oculus division to produce.

Meanwhile, LG, which lost money from its mobile business last year as its flagship products struggled, introduced a modular design to its new G5 smartphones that allows users to replace or upgrade certain functions independently.

The additional modules include a camera grip with extra battery, buttons and a focus wheel, and another module Samsung developed with Danish brand Bang & Olufsen that acts as a external sound card for higher-quality audio.

Analysts and investors cheered LG’s features, which they said were different enough to possibly revive sales, whereas Samsung’s offerings were only seen as featuring incremental upgrades.

For example, the S7 keeps the same screen size as the S6, while the S7 Edge adds just 1cm to its display to reach 14cm. Other minor differences for the Edge include a slightly curvier screen and a less protrusive camera.

WATCH: LG G5 modular smartphone - hands on

LG declined to say when consumers would be able to get their hands on the G5, but made full use of the day to also launch a virtual reality headset and accessories including a drone controller to pair with the G5.

Unlike Samsung’s VR headset, which requires a smartphone be slotted into it to provide a screen, the LG 360 VR connects to the G5 via cable and functions more like an independent set of goggles.

“The LG device has been designed in a very intelligent way,” said Ng.

“It reduces weight on the user’s head, resulting a much more comfortable experience than the Samsung device.”

“I think it’s possible for LG’s mobile business to recover on the back of its new product launch,” said Seoul-based HDC Asset Management fund manager Park Jung-hoon.

“The Galaxy S7, however, doesn’t seem to be creating as much buzz,” he added.

Samsung shares were down 1.3 per cent, underperforming a 0.2 per cent fall for the broader market , while LG shares were up 3 per cent.

Revamps could prove key to smartphone makers as 2016 shapes up to be another tough year: researcher TrendForce expects the smartphone market growth to slow to 8.1 per cent from 10.3 percent a year earlier.

Margin pressures are also expected to intensify for the industry as Chinese manufacturers seek to expand overseas to counter slowing domestic demand.

Samsung on Saturday said its mobile payments service, Samsung Pay, will launch in China in March, a month after Apple launched its Apple Pay service in the world’s biggest smartphone market.

The company fell out of the top five in the world’s top smartphone market last year but hopes that its easy-to-use payments service will help it regain sales momentum.

“The challenge you have got in the smartphone market is breaking through all that sameness. From a design and functionality perspective, everything looks and feels the same,” said Bob O’Donnell, president of Technalysis Research.

“So the challenge is finding things that stick out.”