Samsung Electronics and LG Electronics have unveiled their latest smartphones at the Mobile World Congress industry show in Barcelona, seeking to buck the slowdown in industry growth.
Phone makers face another tough year in 2016 as subdued global growth and persisting currency weakness in key emerging markets sap consumers' spending power.
A push by Chinese manufacturers to expand overseas amid slowing growth in their domestic market may also undercut margins further.
In a bid to recapture market share, Samsung launched two new versions of its Galaxy S smartphone and brought in Facebook chief executive Mark Zuckerberg for a surprise appearance to tout the potential of virtual reality.
LG, which lost money from its mobile business last year as its flagship products struggled, introduced a modular design to its new G5 smartphones that allows 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 cheered LG's features, which they said were different enough to possibly revive sales, but were lukewarm about Samsung's offerings, saying they only featured incremental upgrades.
Revamps could prove key to smartphone makers as 2016 shapes up to be another tough year - researcher TrendForce expects the smartphone market growth to slow to 8.1% from 10.3% a year earlier.
Margin pressures are also expected to intensify for the industry as Chinese manufacturers seek to expand overseas to counter slowing 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 fell out of the top five in the world's top smartphone market last year but hopes that its easy-to-use payments service will help it regain sales momentum.
Traffic jams in Barcelona as metro strike hits major mobile fair
Metro workers in Barcelona went on strike today to demand pay increases and better job security, creating major traffic jams just as the world's biggest mobile fair kicked off.
Organisers of the Mobile World Congress, which gathers together more than 800 telecoms companies and close to 100,000 attendees, were forced to lay on special bus services for those depending on public transport.
The strike, coupled with rain, sparked traffic jams of up to 12 kilometres just outside the Spanish beachside city, according to regional transport authorities.
Metro workers laid on the bare-minimum service, with half of all trains operating at peak time and just 30% the rest of the day.
They are asking for a pay increase and for management to convert part-time contracts into full-time ones, and are also due to stop work on Wednesday.
Bus service employees are also planning to down tools tomorrow and Thursday, while on Friday it will be the turn of rail workers.
The Mobile World Congress is a major event for Barcelona, earning the city some €436m last year.