Bloomberg News

Samsung Unveils Pen-Equipped Phone to Keep Lead on Apple

August 29, 2012

Samsung Electronics Co. (005930) unveiled a new version of the pen-equipped Galaxy Note smartphone as it seeks to defend its lead over Apple Inc. (AAPL:US) amid global patent disputes with the iPhone maker.

The model has a 5.5-inch screen, larger than its predecessor, and runs the latest version of Google Inc. (GOOG:US)’s Android operating system. The device is loaded with software that recognizes handwriting from a digital pen.

“The Note has evolved from every smartphone that we have launched,” Min Cho, a senior manager for Samsung’s mobile unit, said today in an interview at the Berlin consumer-electronics IFA fair. “We can address more consumers and more market opportunities because we can provide the capability of smartphones and tablets at the same time.”

Samsung, the world’s top smartphone seller, is offering a variety of Galaxy handsets, with different sizes and features, to lure consumers from limited choices offered by Apple. The new Galaxy Note may also help to cushion the impact of a potential U.S. sales ban on some of Samsung’s other smartphones. Apple won more than $1 billion in damages Aug. 24 after a jury found the Suwon, South Korea-based company infringed six of seven patents at stake in the trial.

More than 10 million units of the first Galaxy Note were sold in the first nine months, helping Samsung regain the lead in global smartphone sales from Apple this year. The updated digital pen will allow consumers to hover over the screen to preview content and will be available for third-party applications.

Legal Dispute

Apple is seeking a U.S. sales ban on eight models of Samsung. The list includes several devices in the bestselling Galaxy lineup, though not the Note smartphone. Apple’s request for a permanent ban on U.S. sales of some Galaxy devices will be considered at a Dec. 6 court hearing.

Apple is Samsung’s largest customer, buying chips and displays from the South Korean company. Apple accounts for about 9 percent of Samsung’s revenue, making it the company’s largest customer, according to a Bloomberg supply-chain analysis.

In the last quarter, the Samsung controlled about 35 percent of the global smartphone market, followed by Apple with about 18 percent, according to market researcher Strategy Analytics.

Android Camera

Samsung today also unveiled a 16-megapixel camera, called the Galaxy Camera, that runs the latest Android operating system and is able to access the Web via WiFi technology and mobile networks.

“Android was the best option when we considered our platform,” Wonhyung Cho, an assistant manager at Samsung’s digital imaging business, said in an interview. “We wanted access to Android with the Google Play store and to make the full set of camera apps available.”

Samsung opted to tie the camera to the Galaxy range of handsets to associate it with the Android platform, Cho said. With the Galaxy range, which encompasses smartphones and tablet computers, “we had one empty category.”

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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