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Samsung seeks to restore reputation with Note 8

Mark Gurman and Sam Kim
Bloomberg News

The stakes are high for Samsung Electronics Co.’s rollout of the Note 8, after the previous model’s exploding battery fiasco last year.

“None of us will ever forget what happened last year,” Samsung Mobile chief executive DJ Koh told a New York audience Tuesday at the phone’s unveiling.

Like the Note 7, which was scrapped and cost the South Korean company an estimated $6 billion, the new smartphone sports a big screen and advanced features to make it a more versatile device compared with Samsung’s main Galaxy S8 flagship product. Like its predecessors, it includes a stylus.

By keeping the same brand name, Samsung is making clear that the Note 8 is an iterative (and better) device, and signals that it thinks it’s fixed the problems with the previous version. While the Note doesn’t command as wide an appeal as the Galaxy S line, both are premium devices in Samsung’s efforts against Apple Inc. in the battle for global smartphone supremacy. The Note also helps theSuwon-based manufacturer keep pressure on its rival just before the release of three new iPhone models in September.

“The Note 8 is arguably Samsung’s most important smartphone launch in its history,” said Neil Mawston, executive director at Strategy Analytics Inc. “After the Note 7 battery fiasco, Samsung has been given a second chance by consumers and the company must not screw it up.”

Even with the Note 7 debacle and the de facto head of the Samsung conglomerate on trial for bribery and embezzlement, Samsung’s ability to sell hardware and earn profits remains intact. Net income was a record $9.5 billion in the latest quarter, on sales that rose 20 percent in the three months ended June.

The most significant change in the Note 8 is a larger display that curves at the edges like the S8. The 6.3-inch AMOLED screen, a variant of the organic light-emitting diode display used on many recent high-end smartphones, is noticeably bigger than the Note 7’s 5.7-inch touchscreen and slightly larger than the Galaxy S8+’s 6.2-inch display. Although many phone makers are working on ways to get a fingerprint scanner built into the display, the Note 8 — like many other models — will have one in the back.

The company also posted information about a new smartwatch online. Called the Gear Fit 2 Pro, it will be water-resistant and capable of tracking swimmers, two features that became available on the Apple Watch in 2016. Apple plans to debut a new version of its watch later this year that adds support for LTE wireless networks, Bloomberg News has reported. In an interview with CNBC, Koh confirmed the company is also working on a smart speaker to take on Amazon’s Echo and Apple’s upcoming HomePod.

The longer screen on the new phone lets users view more content, such as text messages and emails, without having to scroll, Samsung said in a demonstration. The Note 8 also has new features for the stylus: users can write notes without unlocking the device, draw animated pictures that can be shared with contacts and words can be highlighted to be translated into different languages. The bigger screen also lets users swipe from the display’s edge to launch two paired apps at a time in a split view.

The new smartphone from Samsung will also feature an upgraded camera system that sports two lenses on the back. Like the iPhone 7 Plus, the advanced optics let users take pictures that can determine depth so the background behind a person’s profile can appear blurred. The Note 8 will also support Gigabit LTE, a faster networking technology for browsing the web and downloading content, which the next iPhone won’t have, Bloomberg News has reported.

In the U.S., the Note 8 will be available for pre-order on Aug. 24 and will hit store shelves on Sept. 15. Former Note 7 owners are eligible for a special offer on where they’ll receive an instant trade-in value of up to $425 when they upgrade their current phone for a Note 8.

The Note 8 will face competition from not only Apple’s new iPhone, but also Huawei Technologies Co.’s Mate 9, LG Electronics Inc.’s upgraded V series, and Essential’s PH-1, according to Mawston. Samsung regained its No. 1 position in global smartphone shipments earlier this year, with 23 percent of the market, after losing ground during the Note 7 debacle.Cupertino, California-based Apple had 12 percent in thesecond quarter, while Huawei held 11 percent, according to IHS Markit.

To reassure customers who may have lost trust in Samsung devices because of the Note 7 fiasco, Samsung said it worked with Underwriters Laboratories, a safety certification firm, to validate the Note 8’s reliability. The new smartphone will sport a battery of 3300 mAh, slightly smaller than the Note 7’s power pack. Samsung also released a re-purposed version of the Note 7 called the Note FE last month with a smaller battery.

“I know lots of loyal Note series customers, they were so disappointed,” Koh said in an interview in June. “Disappointment is deeper, the expectation is higher, so I must meet their demand and their expectation through the Note 8.”