In addition to what was already said, String literals [ie, Strings like "abcd" but not like new String("abcd")] in Java are interned - this means that every time you refer to "abcd", you get a reference to a single String instance, rather than a new one each time. So you will have:

String a = "abcd";
String b = "abcd";

a == b; //True

but if you had

String a = new String("abcd");
String b = new String("abcd");

then it's possible to have

a == b; // False

(and in case anyone needs reminding, always use .equals() to compare Strings; == tests for physical equality).

Interning String literals is good because they are often used more than once. For example, consider the (contrived) code:

for (int i = 0; i < 10; i++) {
  System.out.println("Next iteration");
}

If we didn't have interning of Strings, "Next iteration" would need to be instantiated 10 times, whereas now it will only be instantiated once.