Bloomberg News

Samsung to Spend More on Own Mobile Software, Offer Android Alternative

February 29, 2012

Samsung Electronics Co. (005930), the world’s second-largest handset maker, will “significantly” increase investment to bolster its own mobile-phone operating system, pitching it as an alternative to Google Inc. (GOOG)’s Android.

“We believe this is a good platform to build on,” Juha Park, senior vice president of product strategy at Samsung, said in an interview in Barcelona yesterday, referring to the company’s Bada software. “We want to have a full range of portfolio for Bada, from high-end to mass-volume segments.”

Samsung, locked in patent lawsuits with Apple Inc. (AAPL) over mobile technology and design, sold a record 300 million handsets including basic models in 2011, helped by the popularity of its Galaxy products that run on Android. The South Korean company has so far used Bada on models priced lower than the Galaxy range of devices.

“It’s quite meaningful as a niche segment,” said Thomas Kang, a Seoul-based director of wireless smartphone strategies at Strategy Analytics. “The volume may not be huge, but its existence itself can give Samsung a lot of leverage.”

Samsung sold about 8 million to 9 million Bada phones in 2011, compared with 2 million a year earlier, Kang said. Samsung sold 97 million smartphones last year, topping 93 million for Apple’s iPhone, according to an estimate by Strategy Analytics.

To adopt Bada in high-end models competing with the iPhone, Samsung will need to boost the availability of applications running on the software, Kang said.

Samsung will also introduce smartphones and tablet computers using Microsoft Corp. (MSFT)’s Windows software, Park said.

“We will maintain our multiple OS strategy,” he said.

Still, Android models will remain the “bigger part” of Samsung’s smartphone lineup, and the company plans to unveil a successor to the Galaxy S II in the second quarter, he said.

Samsung, which aims to double sales of smartphones and tablet computers this year, expects to sell about 380 million handsets in 2012, including all types, J.K. Shin, head of the mobile business, told reporters in Barcelona on Feb. 26.

To contact the reporters on this story: Jonathan Browning in Barcelona at jbrowning9@bloomberg.net; Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Michael Tighe at mtighe4@bloomberg.net


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