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Samsung, Sony Said to Plan Device Debuts Before New IPhone (4)

August 19, 2013

Samsung, Sony Readying New Devices Ahead of Apple’s Next IPhone

A man walks past a light wall at the Samsung Electronics Co. d'light store in Seoul. Aside from the Galaxy Gear, a wristwatch-like device with features of a smartphone, and Note 3, the South Korean company also plans at least two other high-end handsets this year, including a device using the Tizen operating system. Photographer: SeongJoon Cho/Bloomberg

Samsung Electronics Co. (005930) and Sony Corp. (6758) are said to be unveiling new devices next month as two of Asia’s biggest technology companies try to showcase their products before Apple Inc. (AAPL:US) releases new iPhones and iPads.

Samsung’s Galaxy Gear, a wristwatch-like device with features of a smartphone, and Note 3 will be introduced Sept. 4, according to people familiar with the matter. Sony’s latest Xperia handset, featuring imaging sensors used in its TVs and cameras, will be unveiled the same day, two other people said.

Samsung and Sony are introducing their devices for the holiday shopping season as they try to steal a march on Apple, which has promised “several more game changers” in the product pipeline. Apple, which hasn’t released a new handset this year, plans to introduce new versions of its iPhone and iPad at a Sept. 10 event, according to a person familiar with the matter.

“It is meaningful for Samsung to launch the product first ahead of Apple,” said James Song, a Seoul-based analyst at Daewoo Securities Co. “Putting new devices out there ahead of Apple will at least have some positive leapfrogging impact on both companies.”

The Samsung and Sony announcements are both scheduled two days before the start of the IFA consumer electronics show in Berlin. Samsung fell 0.7 percent to 1,286,000 won in Seoul trading, extending this year’s decline to 16 percent. Sony gained 0.6 percent to 1,975 yen in Tokyo and has doubled this year.

Apple’s Playbook

Apple, the world’s most-valuable technology company, set the standard for product announcements under founder Steve Jobs, and that has continued under Chief Executive Officer Tim Cook. The company’s releases of devices including the iPod, iPhone and iPad gained global media attention. Apple gained 1.1 percent to $507.74 at the close in New York, leaving the shares down 4.6 percent this year.

When Samsung introduced its flagship Galaxy S4 handset in March, the company took a page from Apple’s book with a glitzy launch at Radio City Music Hall in New York that was also streamed live to video screens in Times Square. The South Korean company also plans at least two other high-end handsets this year, including a device using the Tizen operating system.

Samsung, which overtook Apple as the world’s largest smartphone maker last year, next month will introduce a wristwatch-like device that can make phone calls, surf the Web and handle e-mails, according to people familiar with the matter who asked not to identified before a formal announcement.

Wearable Devices

The device will be powered by Google Inc. (GOOG:US)’s Android operating system and go on sale this year to beat a potentially competing product from Apple, the people said. The Galaxy Gear being released next month won’t have a flexible display, though the company is continuing to work on developing a bendable screen, one person said.

Samsung, Asia’s biggest technology company, is racing Sony and other competitors to create a new industry of wearable devices as the market for top-end handsets nears saturation. The global watch industry will generate more than $60 billion in sales this year.

“If Samsung’s new watch is stylish with a lot of cool and ‘wow’ factors, and also is well-tethered with smartphones, it could create new demand,” said Lee Do Hoon, an analyst at CIMB Group Holdings Bhd (CIMB) in Seoul. “If the watch sells well, the upside potential for its earnings will be quite big.”

Apple had a team of about 100 people working on a watch-like device, two people familiar with the matter said in February. The Cupertino, California-based company is seeking a trademark for “iWatch” in Japan.

Hirai’s Plan

Sony’s new flagship Xperia smartphone, developed under the codename Honami, will feature imaging technology developed for its cameras and ultra-high definition TVs, according to two people familiar with the matter.

Xperia handsets are part of CEO Kazuo Hirai’s plan to revive Sony with smartphones, TVs and game consoles that connect with the company’s entertainment content. To lure customers from Apple and Samsung, the Tokyo-based company is using “X-Reality” picture-enhancement chips developed for TVs and sensors for Cyber-shot cameras, the people said.

Yu Tominaga, a Tokyo-based spokesman, declined to comment on whether a new Xperia model will be introduced before the IFA show.

Billionaire Daniel Loeb, whose Third Point LLC controls funds that own about 6.9 percent of Sony, cited Honami and other products as ways for Sony to gain market share, according to a July 29 letter to investors.

Sony this month rejected Loeb’s push for a partial sale of its entertainment assets, with Hirai citing growing Xperia sales for the company’s decision. The company expects to sell 42 million smartphones this year, it said.

IFA runs Sept. 6-11.

To contact the reporters on this story: Jungah Lee in Seoul at jlee1361@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net; Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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