Samsung answers Apple with curvy Galaxy S6 phones, Samsung Pay

The rivalry between Samsung and Apple appears alive and well, with Samsung firing the latest salvo by unveiling two new flagship smartphones, a mobile payments system and a new virtual-reality headset.

On the eve of Mobile World Congress in Barcelona, Samsung on Sunday announced the much-anticipated and highly redesigned next-generation Galaxy S smartphones: the Galaxy S6 and the Galaxy S6 Edge. It also announced its second mobile virtual reality headset, the Samsung Gear VR, as well as its own take on Apple Pay, Samsung Pay.

Samsung and Apple have been duking it out throughout the world in the smartphone wars for several years. And now, as other devices and technologies emerge to complement smartphones, the companies have extended their rivalry to wearable devices and services like mobile payments.

Samsung's newly designed smartphones look to be a long-awaited answer for fans wanting a device that offers the premium design and feel associated with Apple's iPhone. Meanwhile, the Samsung Pay mobile payment capability is a direct response to the Apple Pay system announced last year with theiPhone 6. The new VR headset builds on Samsung's wearable portfolio, which in shear number of products beats Apple's wearables offering. But with the new Apple Watch about to debut, Apple will soon show its might in this category as well.

Here's a look at the new products Samsung is bringing to its fight with Apple:

Samsung Galaxy S6 and Galaxy S6 Edge

Succumbing to the peer pressure of the day, Samsung has ditched the durable plastic mainstay of its smartphones for premium materials, such as aluminum and glass. The Samsung Galaxy S6 and curved-screen Galaxy S6 Edge ditch the the old plastic build and removable battery of previous Samsung flagship phones, and instead sport sharp metal lines and plenty of glass.

The Samsung Galaxy S6 and S6 EdgeJosh P. Miller

For the most part, the two devices offer the exact same specs, with only a few minor differences in dimension and battery life.

Some of the key features Samsung is touting in these new devices include:

• Embedded battery
• No microSD card
• Camera quick launch
• Smarter fingerprint scanning
• Wireless charging
• Quick-charging
• No waterproofing

The devices come in multiple colors, including, gold, platinum, emerald green, blue topaz, and black.

The device uses the latest Android software, Android 5.0 Lollipop.

Samsung said the new smartphones will be available across 22 wireless operators throughout the world during the second quarter, between April and June. All four of the major US carriers plan to offer both new devices, as well as Cricket and US Cellular. UK and Australian networks haven't been announced yet.

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Sprint and T-Mobile announced Sunday that the new Galaxy S smartphones will be available on their networks starting in April. T-Mobile added that the smartphones will also be available on its prepaid brand MetroPCS. AT&T and Verizon haven't said when the phones will be available.

None of the carriers have announced pricing for the new smartphones.

Screenshot by CNET

Samsung Galaxy Gear VR Innovator Edition

Samsung announced its second stab at a virtual-reality accessory at Mobile World Congress. The new Samsung Gear VR Innovator Edition works with both the Samsung Galaxy S6 and S6 Edge.

This new headset is 15 percent lighter than its original virtual reality headset developed with Oculus. And it comes with newly designed straps. Samsung also added ventilation, which should make the device more comfortable to wear long term.

For more on the new Gear VR check out CNET Reviews senior editor Scott Stein's initial hands-on take.

Samsung Pay

Apparently, the world can't have too many mobile payment systems. Samsung debuted its own take on the mobile phone as a wallet Sunday with Samsung Pay, an application that allows you to pay for goods and services by waving your smartphone near a register instead of swiping a credit card or pulling out cash.

Screenshot by CNET

The first devices to get Samsung Pay will be the Galaxy S6 and Galaxy S6 Edge. The

company said Samsung Pay will launch in the US and South Korea in the summer, with Europe and China to come later.

It's not difficult to see that Samsung Pay is a direct answer to Apple's Apple Pay mobile payment offering that was announced last year along with the iPhone 6 and iPhone 6 Plus.

Like Apple Pay, Samsung's version also uses near-field communications, or NFC, a technology that uses an embedded chip to talk with compatible registers. But Samsung says it has gone beyond NFC to also include a technology that will allow it to be used with any register that can accept a credit card. Through its acquisition of LoopPay last month, Samsung has added technology called Magnetic Secure Transmission to the Galaxy S6 and Galaxy S6 Edge that allows these devices to be used with a traditional credit card swipe reader. This essential makes the payment application backwards compatible with nearly all payment terminals around the world.

For Samsung, Galaxy S6 needs to hit with a big bang

Samsung will soon introduce the Galaxy S6, which follows the release of the Note 4 (pictured here) last fall.Sarah Tew/CNET

Samsung, set to debut new models of its top-of-the-line smartphone, needs to offer a design that convinces people to do something they didn't do the last time the Galaxy was updated: buy them.

After leading the smartphone market for the past four years, Samsung has seen its profit slide as customers have defected to rival Xiaomi in China, Micromax in India and Apple nearly everywhere else. In the global smartphone market, Samsung tied with Apple as the No. 1 vendor in the fourth quarter of 2014 -- a competitor it had crushed not too long ago.

With the new Galaxy S6, set to debut on Sunday at Mobile World Congress in Barcelona, Samsung is expected to deliver two versions of the smartphone that incorporate sleeker materials, like metal, versus its previous plastic designs. And at least one model is believed to sport a curved display that wraps around the sides of the device. The South Korean electronics maker may also unveil a mobile payments service that rivals the Apple Pay service introduced last year along with the iPhone 6 and 6 Plus.

"This new device is absolutely critical in terms of getting momentum going again, turning things around and proving Samsung has still got it and can deliver a killer device," said Jan Dawson, an analyst with Jackdaw Research.Overall, the smartphones are expected to be a drastic upgrade from its current Galaxy S5, which was snubbed by reviewers -- and consumers -- for being too similar to the S4. For Samsung to reclaim its position, or at least stop its freefall, it needs to offer something different. And even more than that, Samsung has to prove it's listening to what consumers want -- sleeker designs, less bloatware and software features people actually use.

Samsung's rise

Even before Samsung launched its popular Galaxy S3 in early 2012, the company was already riding high in the mobile phone market. The Galaxy S2, released the year before, helped Samsung take the crown from Nokia as the world's biggest cellphone vendor in the first quarter of 2012.

With the Galaxy S3, its market share skyrocketed. The device was available at all US carriers at the same time -- something very rare at the time. Rather than rely on wireless providers to promote its products in return for exclusive agreements, Samsung persuaded the major carriers to sell the S3 even though they knew rivals would get the phone as well.

It didn't show the carriers the device in advance but shared its marketing plans, helping the carriers feel like they were part of the S3 rollout while Samsung shouldered most of the burden for pushing its device. Ultimately, having the same smartphone at all carriers at once helped Samsung create a focused marketing campaign around a single product -- yes, the way Apple does -- and it's a model now emulated by HTC and LG.

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While the Galaxy S4 in 2013 looked similar to its predecessor, it sported more bells and whistles, including a TV control app and a built-in translation tool. There was also software that tracks users' eye movement to control the device, such as pausing a video when the user looks away from the screen. Samsung is believed to have sold about 40 million units of the device in the first six months on the market, a slightly slower pace than Galaxy S3 sales.

At the same time, Samsung pioneered so-called phablets -- large-screen devices serving as phone-tablet hybrids. Though 2011's 5.3-inch Galaxy Note, was initially mocked for an almost comically large display, the bigger-screen phone appealed to consumers, especially in Asian markets. There was a begrudging acceptance of the Note 2 in the market in 2012 and eager anticipation for the Note 3 in 2013 and the Note 4 last year. The Note led to similar big-screen devices from rival handset vendors including HTC and LG. Even Apple, after dismissing phablets, followed suit last September with the 5.5-inch iPhone 6 Plus.

Samsung's Galaxy S3 became one of the company's best selling phones of all time.Sarah Tew/CNET

The Note line appealed to buyers in many markets, but the Galaxy S remained Samsung's most important device. Anticipation for the Galaxy S5 was high heading into the launch a year ago, but the device didn't live up to the hype -- or at least sales didn't.

Samsung doesn't disclose device shipments, but reports have said Samsung sold about 40 percent fewer of the Galaxy S5 than the Galaxy S4 in their first few months of availability. And research firm Strategy Analytics estimates Samsung's smartphone market share fell to 25 percent in 2014 from 32 percent the previous year. In the fourth quarter, Samsung's slide and Apple's gain resulted in the two companies sharing the No. 1 spot for the first time since late 2011, with each holding a 20 percent share of the market after selling 74.5 million phones.

"Right now [Samsung is] consistently on a downward trend, and that's not healthy," Current Analysis analyst Avi Greengart said. "This is extremely important."

Samsung's struggles

Samsung made a tactical error when it decided not to change the design of its flagship Galaxy S phone much over the past three generations. The Galaxy S5 looks nearly identical to 2013's Galaxy S4 and 2012's Galaxy S3. Consumers shopping for a phone opted for an older, cheaper model instead of buying the newest and most expensive Samsung smartphone.

The result: Samsung is hurting. The company has posted five consecutive year-over-year declines in quarterly operating profit. In the fourth quarter, the IT and mobile communications division (which includes smartphones) recorded a 64 percent drop in operating profit from the year-earlier period, to 2 trillion won ($1.8 billion). Only 37 percent of Samsung's operating profits came from its IT and mobile communications business in the December quarter, compared with two-thirds a year earlier.

Apple and the iPhone pose the biggest threats, with the iPhone 6 and iPhone 6 Plus on their way to being two of the best-selling smartphones of all time. And last quarter, they helped Apple deliver the highest quarterly profit of any company -- ever. The tally: $18.04 billion for its fiscal first quarter ended in December.

Apple's success comes as Samsung faces stronger competition in emerging markets. Smartphone makers Xiaomi, Micromax and Huawei introduced devices with high-end features at low prices. In comparison, Samsung's strategy has been to to dump older smartphones on the market at low prices. But consumers in emerging markets didn't want old, inferior technology -- especially when Xiaomi and others were offering more compelling devices at the same price.

"Samsung continues to face intense competition from Apple at the higher end of the smartphone market, from Huawei in the middle tiers,and from Xiaomi and others at the entry level," said Neil Mawston, an analyst with Strategy Analytics.

Because Samsung's hardware features like bigger screens and NFC technology, which allows users to share data or pay for items by tapping their phones, are no longer unique, the company has looked to software to help it stand out. But it hasn't offered features users covet. The Galaxy S4 included apps that were considered gimmicks, and Samsung minimized or killed off many of the items with the Galaxy S5. This year's model is expected to go a step further, with Samsung preloading less bloatware -- the name given to the software features -- on its devices. Instead, buyers will be able to choose whether to download Samsung's apps or not.

And Samsung plans to be more thoughtful with the software and services it includes on its devices. That likely will include a mobile payments service. In mid-February, the company acquired LoopPay, a startup whose technology turns existing card magnetic strip readers into contactless payment receivers. That makes it easy for retailers to accept mobile payments without changing their existing point-of-sale terminals, and the LoopPay setup "has the potential to work" in about 90 percent of existing POS terminals, according to Samsung.

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By comparison, Apple Pay requires POS terminals to be equipped with NFC (near field communications) chip technology, which allows information to be shared when two devices are held close together. Retailers have to upgrade their systems to take advantage of Apple Pay, Google Wallet and other NFC-based systems.

Samsung expects device sales to improve as it introduces new devices with slimmer designs and flexible displays that allow the screen to wrap around the side of the device. It also expects the expansion of faster 4G LTE wireless networks across the globe and increased interest in emerging markets to help boost sales and profit, Jin-Young Park, vice president of Samsung's mobile business,said during the company's earnings report last month. "We are preparing differentiated and innovative products with specialized features," he said.

And that sets the stage for the Galaxy S6, which like all of Samsung's other phones in the line is powered by Google's Android mobile operating system software. Strategy Analytics' Mawston estimates Samsung will sell more Galaxy S6 units than Galaxy S5 devices in the first year on the market -- about 10 percent more, to be precise.

It all comes down to how well the devices look and how well they work with new apps and features, like the anticipated mobile payments service. If the Galaxy S6 doesn't excite consumers, Samsung risks becoming the next BlackBerry, a once-dominant and innovative phone maker now struggling to survive. That's a fate no one envies.