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Galaxy S8 Release Likely Delayed And That is Not Even Samsung is Biggest Problem Right Now

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The Mobile World Congress in Barcelona is one of the biggest mobile events of the years, and Samsung has used the platform the past three years to unveil its flagship Galaxy S phones to great acclaim. The Note 7 fire fiasco will likely end that streak.

The Wall Street Journal, citing sources close to the South Korean tech giant, is reporting that Samsung engineers still have not figured out the cause of the Note 7 battery fires, and that executives within the company are now “looking to delay the announcement of the Galaxy S8,” perhaps as late as April.

That’d be a two month delay, and will almost certainly damage the momentum Samsung had built with the critically-acclaimed Galaxy S6 and S7. Samsung, however, is looking to make a statement with the S8. In addition to the all but certain rumors that the phone will introduce a smarter Siri-like digital assistant, there are also rumors that the S8 will go the same route of the Xiaomi Mi Mix and introduce a mostly bezel-less device with a screen-to-body ratio of more than 90%. But all that talk is moot until Samsung engineers figure out what went wrong with the Note 7.

Samsung may have bigger concerns right now, however. The company’s headquarter in Seoul was raided by government authorities this morning after allegations that it provided financial assistance ($4 million) to Choi Soon-sil, who is at the heart of a major political scandal in South Korea that has led to mass protest and resignation of the South Korean president’s chief of staff and four senior aids.

Samsung BioLogics manufactures complex biologic drugs made from living cells, blood components and tissue, rather than chemicals, for global pharmaceutical companies like Bristol-Myers Squibb and Roche. The company is currently almost entirely owned by Samsung’s de facto holding company C&T, which has a 52.1% stake, and Samsung Electronics, which owns 47.8%.

Samsung, one of the most diversified conglomerates in the world, had its eyes on biopharmaceuticals for a while. It named the industry as one of its five future engines of growth back in 2010, together with electric vehicle batteries, light-emitting diodes, medical equipment and solar batteries, and said it will inject about 23 trillion won ($21.7 billion) into the new growth drivers by 2020.

Out of the five industries, biopharmaceutical is the least related to Samsung’s expertise of electronics and semiconductors. The tech giant venturing into unfamiliar territory is even more surprising considering Samsung has stepped up efforts to streamline its business focus, selling its chemical units to rival Lotte Group in October last year.

But Samsung seems confident it can be a top contract drugmaker as it does have experience as a contract manufacturer, making smartphone chips for the likes of Apple and Qualcomm. Samsung is confident enough to take on the global pharmaceutical market, which is expected to grow up to $278 billion by 2020, with an annual growth rate of more than 8% on average, according to Evaluate Pharma, amid an aging population and the development of medical technology.

Samsung BioLogics said it aims to strengthen its presence in the rapidly growing global biopharmaceutical market by utilizing its world-class plant design and operation technology that maximizes production efficiency. The company was founded just five years ago and it’s already the third-largest contract drug manufacturer by production capacity. It’s set to be the biggest in 2018, when its third plant is scheduled to be completed, which is where half of the funds raised from the IPO will go towards.

The growth of Samsung’s biopharmaceutical arm comes at a time when the smartphone market is flat and getting more difficult to make profits. Samsung and its shareholders are hoping manufacturing drugs will be the conglomerate’s next cash cow.

Source : forbes

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