SEOUL, Feb. 22 (Yonhap) - In the face of sagging global smartphone sales, Samsung Electronics Co. and LG Electronics Inc. are jostling to win back customers with new gadgets boasting much-upgraded cameras and the novel technology of virtual reality (VR).
Samsung showed off its flat screen Galaxy S7 and curved screen Galaxy S7 Edge on Sunday before the start of the Mobile World Congress, the world’s largest tech fair, in Barcelona, with LG showcasing the G5 smartphone. Their latest gadgets all come with never-before-seen features.
The new Galaxy models are the first smartphones to adopt the so-called dual pixel sensor that enables customers to take higher quality photos.
The G5 is equipped with a full-fledged “modular” system that allows users to add more gadgets below the device, enhancing camera and sound-related features.
Samsung fans also cheered when the company said the Galaxy S7 series has brought back the micro SD card slot, a feature long been missed by Galaxy users after it was not included in the phone’s predecessor.
But what stole the show were both companies’ VR gear, which Samsung and LG claim will emerge as their new growth engine down the road.
Samsung and LG’s bids to sell more smartphones by creating a VR ecosystem come as smartphones sales no longer stand as the dominant cash cow of the electronics giants, especially due to the narrowed technology gap with Chinese players and the market’s saturation.’
Samsung’s IT and mobile business, which is in charge of smartphones, posted an operating profit of 2.23 trillion won (US$1.8 billion) in the fourth quarter, up from 1.96 trillion won a year earlier. But the sector’s operating profit continued to remain well below the 6.43 trillion won posted in the first quarter of 2014.
LG’s mobile business posted an operating loss of 43.8 billion won in the fourth quarter last year, continuing its sluggish performance after the loss of 77.6 billion won posted a quarter earlier.
Industry watchers said Samsung and LG are expected to engage in fierce competition to take the lead in the emerging VR segment.
Last year, Samsung took the initiative by introducing the Gear VR that allowed users to enjoy 360-degree video content through a headset.
With the introduction of its VR device, the LG 360 VR, LG aims to create its own ecosystem and take on bigger rival Samsung.
LG tried to differentiate itself from Samsung by making its headset much lighter. While users had to insert smartphones into the Gear VR, making the device inevitably heavier, the LG 306 VR only needs to be connected through a cable.
LG also introduced the LG 360 Cam, allowing users to create their own VR videos. The camera comes with a 1,200 mAh battery that allows users to film videos up to 70 minutes long.
While LG’s VR headset has a built-in display that makes it lighter, industry watchers question the quality of the resolution. The Samsung Gear VR allows users to insert their own high-end smartphones for better displays.
LG, however, explained using its VR gear is like “watching a 130-inch screen at a 2-meter distance.”
Samsung did not introduce a new VR headset device at the showcase of the Galaxy S7, but it did roll out the Gear 360, which allows users to film VR content. The device can simply be connected to a smartphone.
Mark Zuckerberg, co-founder of the social network service Facebook, also joined Samsung’s showcase event, highlighting the tie-in between the two firms in the VR segment and adding voice to its vision.
Zukerberg said he has talked with Samsung Electronics Vice Chairman Lee Jae-yong on making an affordable VR device, which makes the technology more accessible to a wider scope of people.
“VR is the next platform where anyone can experience anything they want … VR is going to be the most social platform,” Zukerberg said. “That’s how we worked with Samsung to develop the Gear VR.”
“(The Gear VR) combines the best hardware from Samsung with the best VR software from Facebook with Oculus,” Zukerberg added. Facebook acquired Oculus VR earlier in 2014, reflecting the firm’s efforts to tap the virtual reality business.
Samsung was also the first at the Mobile World Congress to hand out thousands of its VR devices to audiences, not being hesitant to boast of their achievements.
LG promoted its efforts to create its own VR ecosystem by inviting officials from Google Inc., showing how the devices can be used for the Street View platform.
Local analysts are divided for the time being on whether the VR features will give an extra boost to the sales of the Galaxy S7 series and the G5.
“Considering the Galaxy S7 series are the biggest beneficiaries of the expansion of the gaming and VR market, the combined annual shipments of the new Samsung smartphones will reach 38 million units,” said Kim Sang-pyo, an analyst at KB Securities Co. in his report.
Analyst Kim Rok-ho from Hana Financial Investment echoed the view, adding that smartphone sales will likely edge up following the expansion of VR-related content. Accordingly, annual sales of the G5 are estimated to surpass those of the G3, which hit a record 13.5 million.
Kim, however, estimated sales of the Galaxy S7 at mid-30 million units, adding it lacks innovation in terms of hardware and design compared to the predecessors. Shipments of the Galaxy S6 are estimated at 38.9 million units for 2015.
Other industry watchers cautioned it is too early to say that the VR segment will be a lifesaver for Samsung and LG, adding that it’s just one of many possibilities that can revitalize the saturated handset market.
“Newly introduced VR devices are just accessories of smartphones,” another analyst said, who wished to remain anonymous. “It is not easy to generate significant profit through those tools, although there are still possibilities. There are many technologies which smartphone makers can turn to, such as holograms. The VR segment is just one of them.”