It’s fair to say that the coming weeks for Samsung could have a profound impact on their reputation and profit margins. The release of the Galaxy S8 will happen later this month, with much being made of it being the biggest launch of an Android smartphone this year. Despite a good reception for its predecessor, the S7, a lot hinges on the Korean giant’s new phone’s success.
The Galaxy S8 was revealed at a standalone event on Wednesday 29th March, later than the proposed release during a major smartphone event in Barcelona. Much is being made of its appearance, with rounded corners to be amongst the changes from the S7. Following on from the launch event, it’s expected to be released in mid-April.
While there is at least something to look forward to with the new phone launch, Samsung has a few worries closer to home. Last Tuesday, a trial against five of the company’s executives began in South Korea. The case relates to involvement in a political scandal that could lead to the impeachment of the country’s president, Park Geun-hye.
Whilst this may cause more ripples in Seoul than further afield, this story could take the shine off recent good performance in the markets worldwide. In London, Samsung’s share price reached a three-month high on Wednesday, climbing to US$867.50 per stake. Long-term, the price has risen by nearly two-thirds compared to this time last year.
The tech titans’ performance on the markets notwithstanding, it has been far from plain sailing for Samsung. Counting the cost of the disastrous Galaxy Note 7’s failure last year, along with uncertainty over the trial, means that anyone interested in share dealing may find it worth their while to think carefully before investing their hard-earned money in their stock.
[pullquote]As a result of confidence in the company being mixed at best, trepidation around the short-term prospects for Samsung looks set to continue.[/pullquote] That being said, their last set of quarterly financial results were better than expected, with profits at a three-year high despite the Note 7’s write-off costing something in the region of US$5bn.
Components are one of Samsung’s biggest earners, helping to cover the costs incurred by the Note’s flop. If the S8 is a success, there is every chance that profits look set to soar further. Operating profit recorded for the final quarter of 2016 was around US$7.8bn, with expectations that the new model will give them a boost to nullify any costs incurred by previous mistakes.
Another story that Samsung watchers may want to pay attention to is the revelation that some of its devices, including its Smart TVs, have been compromised by the CIA. The leak, courtesy of WikiLeaks, has also reported that some of their rivals have been affected too, but any further stories could overshadow any good news coming from Samsung HQ.
In summary, the S8 launch needs to go well in order to keep shareholders, bosses, and customers happy. It should be an improvement on the S7 and banish any lingering thoughts about the Note 7. Any faults found with their latest gadget could haunt them later on this year, causing further damage to the reputation, if not the bank balance, of one of the world’s most recognizable tech brands.