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Samsung looks to Galaxy S8 to regain consumer trust

Samsung will seek this week to draw a line under the Galaxy Note 7 smartphone safety scandal with the launch of the South Korean technology company’s latest handset, the Galaxy S8.

Released last August, the Note 7 was hastily withdrawn after a series of incidents in which the phones caught fire. Samsung expects the debacle, which dealt a severe blow to its reputation, to have cost the company more than $5bn.

Hopes are high that Wednesday’s release of the S8, which has generated a buzz for its sleek design and top-end features including the digital assistant Bixby, will help Samsung win back consumer trust while bolstering its credentials as Apple’s chief adversary.

“For Samsung, a lot is at stake and it is probably going to try extra hard to succeed with S8 this time . . . to stay strong in the premium segment and regain some of the lost confidence after Note 7 issues,” said Kiranjeet Kaur, analyst with IDC.

“The Galaxy S series is very important for Samsung, not just for it to rack up smartphone [sales] volumes but to also showcase its strengths in product design and innovation. And this time it is doubly so.”

Officially, Samsung has remained tight-lipped about many of the new smartphone’s features, but a steady stream of leak suggests the company has focused on device design as it moves towards “all-screen” handsets.

It has ditched the home button and minimised bezels in what analysts see as a strategy aimed at differentiating the S8 from its competitors.

One feature that Samsung has been open about is the addition of an extra button: a switch on the side for Bixby, an artificial intelligence assistant to compete with Apple’s Siri.

“Confusion around activating a voice interface is a barrier we have removed to make it feel easier and more comfortable to give commands,” said InJong Rhee, head of R&D at Samsung’s software division.

Samsung is hoping the device will rejuvenate its market share, which has been slipping following the Note 7 fiasco and the arrest last month of its de facto head Lee Jae-yong on corruption charges.

According to data from IDC, Samsung’s share of the global smartphone market was 18 per cent in the fourth quarter of 2016, down from 20 per cent one year earlier.

“We will make sure the [Note 7] problem never gets repeated,” said JK Shin, Samsung’s chief executive in charge of the mobile division, adding that the company “will revive our premium image by improving designs through differentiation and introducing innovative intelligence interfaces”.

For analysts, the S8 has the potential not only to challenge Apple’s iPhone but also shake up the broader smartphone market.

“Given that iPhone 7 sales are on the decline and there are few other high-end handsets available in the market, now is certainly a very opportune time for Samsung to release the S8,” said Roh Geun-chang, analyst at HMC Investment & Securities. “This phone could liven up the smartphone market again.”

Additional reporting by Kang Buseong and Song Jung-a

Via FT