Tuesday, March 28, 2017

Why Samsung's Galaxy S8 And Apple's iPhone 8 Launches Could Be The Most Important Ever

By Arjun Kharpal
CNBC
March 28, 2017

Phone launches follow a pretty similar pattern: Flashy press conference, excitement, pre-orders and the investing world keeping an eye on how well these devices sell.

It's always high stakes for the companies, but perhaps more than ever, the launch of the Samsung Galaxy S8 on Wednesday, and the anniversary edition of the iPhone later this year, could be the most important smartphone launches ever for both companies.

That's because it comes at a time when the smartphone market is saturating and after both companies have gone through testing periods. The Galaxy S8, which has been extensively leaked, will be released following the Note 7 scandal last year, in which Samsung was forced to recall and eventually discontinued the handset after several caught fire. The South Korean giant apologized and released a full report on what went wrong in January, but the episode is still fresh in consumers' minds.

At the same time, Samsung Group's heir-apparent Jay Y. Lee was charged by prosecutors with bribery and embezzlement connected to South Korea's ongoing corruption scandal which led to the impeachment of the country's President Park Geun-hye.

A successful and innovative Galaxy S8 smartphone will be key to shifting attention away from Samsung's current issues, putting the Note 7 saga to bed, and boosting sales and profit in its mobile division.

Meanwhile, Apple has also had a tough time recently. In its fiscal 2016 results, the U.S. technology giant experienced the first annual revenue decline since 2001, after iPhone sales fell for three consecutive quarters. Many have questioned Apple's chief executive Tim Cook's ability to innovate pointing to the Apple Watch as the only new product category under his leadership.

While talk of driverless cars and augmented reality (AR) – a technology Cook has said could be as big as the smartphone itself - have yet to materialize in any products. The iPhone 7, Apple's last flagship got criticized for not being a big change from the iPhone 6s.

But from recent leaks, the Galaxy S8 and the iPhone anniversary addition, potentially called the iPhone 8, may just be the best devices both companies have ever produced. Samsung's flagship will have a big screen and new artificial intelligence (AI) capabilities, while Apple's smartphone is rumored to have a new 3-D camera and AR capabilities. Morgan Stanley said in a recent note that the next iPhone will create a "supercycle" for Apple.

Driving a new wave of users to buy the next flagship devices will also be crucial if Apple and Samsung want their customers to adopt technologies and services that they are staking their future on such as AI and virtual reality.

But competition is tough and Huawei is chasing both Apple and Samsung with the Chinese firm establishing itself as the number three smartphone player in the world.

With such high-expectations and both companies keen to put recent issues in the past, Samsung and Apple need to deliver with their flagship launches, which can't be like any other.


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