Samsung Plans Galaxy Smartphone Launch to Compete With IPhone, BlackBerry

Samsung Electronics Co., the second- largest maker of mobile phones, plans to launch its Galaxy S smartphone at four major U.S. wireless carriers in a bid to gain ground in that market on Apple Inc. and Research In Motion Ltd.

The Suwon, South Korea-based company will start selling the phone, which runs on Google Inc.’s Android software, at AT&T Inc., Sprint Nextel Corp., Verizon Wireless and T-Mobile USA this summer. The near-simultaneous launch at all four major carriers is unusual in North America, where carriers have moved away from such deals as they seek exclusive access to phones such as the iPhone sold by AT&T, said wireless analyst Ramon Llamas of the market research firm IDC.

“It’s pretty much unheard of,” Llamas said. “It’s going to put Samsung manufacturing in a good position to push more devices out the door.”

Samsung holds 22 percent of the worldwide market for mobile phones, second only to Nokia Oyj, according to IDC. Its share of the more lucrative and faster-growing smartphone market is just 4 percent, according to the company’s own estimates.

With the Galaxy and other devices, Samsung intends to more than double its market share for smartphones to more than 10 percent by the fourth quarter, Lee Donjoo, senior vice president of the company’s Mobile Communications Division, said in an interview. The company plans to reveal additional details about carrier-branded versions of the phone at an event on June 29.

Android smartphones have become more competitive with Research In Motion’s BlackBerry and Apple’s iPhone. Android’s share of the global smartphone market hit 9.6 percent in the first quarter from 1.6 percent a year ago, according to market researcher Gartner Inc.

Custom Phones

Samsung is winning worldwide carrier support for the Galaxy S, with 110 mobile operators offering it around the world, by customizing features and software for different carriers.

The Galaxy S phone Samsung unveiled in March offered a 4- inch high-definition display, 1GHz processor, 5-megapixel camera with high-definition video recording, gyroscope and accelerometer. A version for Sprint, the third-largest mobile- phone carrier, adds a full slide-out keyboard and includes the ability to connect to the next-generation so-called 4G data network, according to a statement today.

Sprint’s version of the Galaxy S, called the Epic 4G, will be the second device to run on the so-called fourth-generation network that Sprint owns with Clearwire Corp. It joins the HTC Corp. EVO, which can download content about 10 times faster than third-generation technology, allowing users to make video calls and watch World Cup soccer matches live, Sprint said.

Boost Revenue

T-Mobile’s version of the phone, Samsung Vibrant, will come pre-loaded with content, including the movie ‘Avatar,’ the carrier said in a statement today. AT&T said in a statement June 17 that its Samsung Captivate will automatically connect at no charge to its national Wi-Fi wireless network and include software to sync contacts wirelessly with a computer.

Samsung plans to use the Galaxy S and other phones in development to boost its revenue, company executives said. The average selling price for Samsung handsets in the first quarter was $118, while Apple sells its new iPhone 4 to AT&T Inc. for about $610, estimates Piper Jaffray Cos. analyst Gene Munster.

Smartphones represent the largest growth opportunity within mobile devices. They will grow to 50 percent of all sales by 2014 from 21 percent this year, according to Yankee Group.

Samsung could benefit if carriers continue to shift away from exclusive deals for what the industry calls “hero devices” to emphasize fast data download times or movie and television services that are only available on their networks, Yankee Group analyst Carl Howe said.

“There’s a growing recognition that everybody has a hero device,” Howe said. Carriers “may have just recognized maybe it’s better to focus on our value to the consumer, getting the brand and service in front of them instead of focusing on the hardware maker.”

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net.

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