New Samsung S7 (R) and S7 edge smartphones are displayed after their unveiling ceremony at the Mobile World Congress in Barcelona, Spain, February 21, 2016. REUTERS/Albert Gea

Samsung Electronics Co Ltd and LG Electronics Inc unveiled their latest smartphones at the Mobile World Congress industry show in Barcelona on Sunday, in a step that aims at reversing the slowdown in industry growth.

2016 has been another tough year for phone makers, especially with low global growth and continuing currency weakness in significant emerging markets sap consumers’ spending power. A push by Chinese manufacturers to develop overseas in the midst of decelerating growth in their domestic market may also weaken margins further.

In an attempt to recapture market share, Samsung launched two new versions of its Galaxy S smartphone and brought in Facebook Inc Chief Executive Mark Zuckerberg for a surprise appearance to praise the potential of virtual reality, encouraging hundreds of people to rush to the stage to record the moment.

After LG’s leading products had struggled last year causing it huge losses, it introduced a modular design to its new G5 smartphones allowing users to replace or upgrade functions such as camera and audio independently.

It also launched a virtual reality headset and accessories including a drone controller to pair with the G5.
Analysts and investors applauded LG’s features, which they said were different enough to possibly resuscitate sales, but were unexcited about Samsung’s offerings, saying they only featured incremental upgrades.

“I think it’s possible for LG’s mobile business to recover on its new product launch, since they delivered significant changes with the G5,” said Seoul-based HDC Asset Management fund manager Park Jung-hoon.

“The Galaxy S7, however, doesn’t seem to be creating as much buzz,” Park said.

Samsung shares were down 1.3 percent as of 0212 GMT, floundering a 0.2 percent fall for the broader market, while LG shares increased by 3 percent.

Renovations could turn out to be fundamental to smartphone makers as 2016 shapes up to be another tough year: researcher TrendForce expects the smartphone market growth to slow to 8.1 percent from 10.3 percent a year earlier.
Margin burdens are also expected to deepen for the industry as Chinese manufacturers try to expand overseas to face the reducing domestic demand.

Samsung on Saturday said its mobile payments service, Samsung Pay, will launch in China in March, a month after Apple launched its Apple Pay service in the world’s biggest smartphone market.

The company dropped out of the top five in the world’s top smartphone market last year but expectations that its easy-to-use payments service will contribute to regaining sales momentum.

“The challenge you have got in the smartphone market is breaking through all that sameness. From a design and functionality perspective, everything looks and feels the same,” said Bob O’Donnell, president of Technalysis Research.

“So the challenge is finding things that stick out.”