Samsung Unveils Galaxy S6 Smartphone

By Jonathan Cheng 

BARCELONA-- Samsung Electronics Co. introduced a flagship smartphone with a curved screen and mobile-payment system, seeking to spark sales after a painful year that saw its leadership eroded by Apple Inc. and Chinese upstarts like Xiaomi Corp.

The new Galaxy S6 and its double curved-screen variant the Galaxy S6 Edge, released Sunday on the sidelines of an annual trade show here, outlines Samsung's latest strategy for finding its footing: take on Apple's iPhone head on, while bringing even more of the manufacturing process under its control.

The new phone will be available globally starting April 10. In the U.S., Samsung said it will be offered by all the major carriers, including Verizon Wireless, AT&T, T-Mobile and Sprint. ( Click to compare specs for the S6 and other smartphones.)

The stakes are high for Samsung, which saw its previous flagship smartphone, the Galaxy S5, fall flat with consumers. In the one year since that launch, the smartphone market has become more challenging for the South Korean tech giant. One the high end, Apple's enlarged iPhones drove record sales and challenged Samsung's dominance of premium large-screen smartphones. On the low end, Chinese and Indian players released a raft of sleek handsets priced at a fraction of comparable Samsung smartphones.

To reverse the damage, Samsung is releasing a new device that directly rebuts many of the criticisms that dogged its predecessor. In contrast to the mostly plastic Galaxy S5, the S6 will come encased in a slim frame made of reinforced glass and aircraft-grade aluminum.

Samsung also matched Apple's mobile payment service with one of its own, dubbed Samsung Pay, and designed it to work with the magnetic-stripe machines that are found at nine out of ten cash registers in the U.S.

To address complaints that Samsung phones were bogged down with little-used software, the company removed many of its apps and streamlined the user interface.

Unlike Apple, Samsung also appears to be pinning more of its software and services hopes on partners like Google Inc., Facebook Inc. and Microsoft Corp., all of which will get prominent placement on Galaxy S6 devices as Samsung pulls many of its own apps.

Perhaps most importantly for Samsung's attempts to reverse its sliding profits is what's inside the device: application processors developed entirely in house rather than chips from Qualcomm Inc., giving Samsung more control over almost all the components in its handset.

The new smartphone is the product of a period of soul-searching after a stretch of dominance that began in 2012 with the launch of the Galaxy S III. At one point in 2013, Samsung outsold Apple by nearly three times, while using its scale and marketing muscle to sideline other rivals selling smartphones powered by Google's Android operating system.

Company executives now acknowledge that they grew complacent by the release of the Galaxy S5 last year, which they framed at the time as a "back to basics" smartphone that deliberately eschewed gimmickry in favor of a focus on improving everyday functions.

It landed with a thud. The warehouses of unsold smartphones weighed on Samsung's bottom line, dragging full-year operating profits down 32% last year from a year earlier.

Late last year, Samsung ousted its mobile marketing and R&D chiefs and released a series of mid-range smartphones to directly take on low-end challengers in China and India.

For the new flagship phone, Samsung executives codenamed the development process "Project Zero," part of a broader bid to go "back to the drawing board," in the words of Young-hee Lee, Samsung's head of mobile marketing.

"We're learning from our missteps," Ms. Lee said in an interview.

The company reconfigured its production process to be able to crank out high volumes of curved-screen smartphone displays and aluminum cases, and laid the foundation for new features like the mobile payment system through its acquisition last month of LoopPay, a U.S. startup.

Executives also tried to rein in unrealistic sales expectations that weighed on company earnings. "There was a lot of learning from last year, " Ms. Lee said. This year, she said, "we should worry about being out of stock, not overstock."

The curved variant will retail for about $100 more than the Galaxy S6, and will be "in the same price bracket" as the Galaxy S5, Ms. Lee said. The Galaxy S5 sold in the U.S. for about $200 with a two-year contract.

Apart from the curved screen, the S6 and S6 Edge will otherwise be virtually identical, and both will be in mass production. The S6 has a 5.1-inch display and higher resolution screen than the iPhone 6, which has a 4.7-inch display. The S6 has a 16-megapixel rear-facing camera, which is twice what Apple offers, and the phone supports wireless charging technologies.

The biggest shift for Samsung may be the least obvious to most consumers. By using its own 64-bit Exynos processors to displace the Qualcomm processors that were long a mainstay of Samsung's premium smartphones, Samsung will pocket more profit from each device that it sells.

The chips, manufactured on a 14-nanometer chip process technology that is a step ahead of its rivals, will translate into better performance and battery life, analysts say.

Compared with the S5, Samsung is offering more built-in storage, a higher-resolution display and a 5 megapixel front-facing camera on its newest model. The S6 also has a touch-activated fingerprint scanner, a switch from a swipe-activated scanner on the S5 that users complained didn't always work well.

Min-Jeong Lee contributed to this article.

Write to Jonathan Cheng at [e-mail]

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