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Samsung Galaxy S8 Biggest bet For The company

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The Samsung Galaxy S8 will likely be the South Korean firm’s biggest test yet: a phone that has to live up to the highest expectations and also the toughest scrutiny.

Even in normal circumstances, the stakes are high when a phone maker unveils its latest flagship handset. But the past few months have been anything but normal for Samsung.

And at the simultaneous release of the S8 in London and New York, the elephant in the room is a big one.

This is the launch that follows the Note 7 scandal last year, the phone Samsung recalled and then eventually scrapped after some batteries overheated and caught fire.

“With this launch, Samsung gets a chance to redeem itself after the Galaxy Note 7 fiasco…but it may be too early to say that Samsung’s troubles are behind it now,” says Kiranjeet Kaur of tech analysts IDC.

How much damage has been done?

While the Galaxy S models are the company’s flagship line and widely seen as the only serious competitor to Apple’s iPhone, the Note models are a range of large-screen phablets, aimed only at a niche market.

So did the global headlines of Note phones going up in flames burn the Samsung image?

Note 7Image copyrightAP
Image captionSamsung has said its Note 7 recall has cost it millions of dollars

Anecdotally the brand still seems in good shape.

Despite the YouTube videos of burning phones, the drip-drip of negative stories and the internet memes, Samsung does not seem to have been as tarnished anywhere near as badly as you might expect.

A Reuters/IPSOS study in the aftermath of the scandal found Samsung users in the US remained as loyal to their brand as Apple users were to their iPhones.

Because the problem was identified shortly after the Note 7 was released the recall was mostly limited to early adopters, and this limited the negative experiences, said Jan Dawson of Jackdaw Research.

“Your own personal experience trumps what you read and what people tell you,” Dawson said at the time of the Reuters/Ipsos poll.

Yet recalling, and then ultimately killing off, the Note 7, is thought to have cost Samsung $5.3bn (£4.3bn).

So, are they struggling financially?

No. Samsung Electronics saw profits surge 50% in the last three months of 2016, despite the Note 7 phone fiasco.

And the firm’s share price has climbed steadily over the past 12 months.

Samsung share price
Image captionDespite a difficult year, Samsung’s shares have climbed and climbed

That resilience is largely because the Galaxy S7 – the precursor to the new phone launched this Wednesday – has been a real success.

And it is even more remarkable given Samsung is also embroiled in South Korea’s political corruption scandal – with the firm accused of having bribed the government in return for political favours – something it strenuously denies.

Samsung heir apparent and de facto boss Lee Jae-yong has been arrested and is on trial accused of bribery and corruption. He also has maintained his innocence.

While this scandal has sent shockwaves though South Korea and the country’s corporate world, there is no evidence it has impacted the decision of consumers around the world when it comes to choosing their next smartphone.

What’s the competition?

For the past several years, Samsung’s has been caught in the middle, competing with both Apple’s premium iPhone on the one hand, and cheaper Chinese smartphones on the other.

Neither of these have gone away. The iPhone 7 continues to be a top seller for Apple, with the US company now even offering cheaper options – the older iPhone 6s and the scaled down iPhone SE – that still benefit from the premium brand image but are more affordable.

These factors saw Apple overtake Samsung in smartphone shipments for the first time in the last three months of 2016.

The IDC data showed Apple had 18.3% market share compared with Samsung’s 18.1%.

From the side of Chinese competition, the likes of Huawei, Oppo and Xiaomi are continuing to offer Android phones that regularly get top reviews but tend to be much cheaper than whatever Samsung has to offer with comparable specifications.

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