Samsung to Sell Google Phone With Facial Recognition in Challenge to Apple

Samsung Electronics Co. will begin selling the first mobile phone run on Google Inc. (GOOG)’s new operating system next month, counting on facial-recognition security to help challenge Apple Inc. (AAPL)’s iPhone.

The Samsung Galaxy Nexus, featuring the Ice Cream Sandwich software, also has ‘talk-to-type’ technology, image-editing tools, off-line search for e-mails and support for mobile payments, according to a statement handed to reporters in Hong Kong today. No price was given.

Google jointly developed the phone with Samsung as Chief Executive Officer Larry Page pushes to increase the Mountain View, California-based company’s 43.4 percent share of the smartphone market. The introduction of the Galaxy Nexus comes less than week after Apple sold more than 4 million units of its latest iPhone in three days, cementing the model’s position as the world’s bestselling smartphone.

“The new features like facial recognition are improvements and will help attract more users,” said Richard Ko, who rates Google partner HTC Corp. (2498) “neutral” at KGI Securities Co. in Taipei.

The Samsung phone, which will go on sale in the U.S., Europe and Asia next month, is fitted with a 4.65 inch display, a 1.2 gigahertz processor and a 5 megapixel camera. Apple’s latest iPhone has a 3.5-inch display, measured diagonally, and an 8-megapixel camera, according to the company’s website.

‘Face Unlock’

The Samsung phone’s ‘Face Unlock’ facility uses facial recognition to prevent unregistered people from using it, according to the statement.

Engineers from Google and Samsung worked in the same building on the Galaxy Nexus phone, Andy Rubin, senior vice- president of Google’s mobile division, said in Hong Kong.

“We are one big team,” he said.

Unveiling the software with Samsung, the biggest seller of Android phones, should reassure partners that Google won’t favor Motorola Mobility Holdings Inc. over other handset makers, said Song Myung Sup, a Seoul-based analyst at HI Investment & Securities. Google bought Motorola in August for $12.5 billion.

Google Chairman Eric Schmidt said earlier this month that the company “won’t do anything with Motorola, or anybody else by the way, that would screw up the dynamics of that industry.”

Catching Apple

Ice Cream Sandwich, an updated version of Google’s Android operating system, will work on both phones and tablets. That’s a break from the past, where different devices ran on separate software, and it may encourage developers to write more applications for the platform.

The Android Market has more than 300,000 apps, according to today’s statement. Earlier this month, Apple said there was more than 500,000 applications in its App Store.

“Ice Cream Sandwich could provide the critical push in the race to catch Apple,” said Mark Newman, an analyst at Sanford C. Bernstein & Co., who is based in Hong Kong. “Apple’s software is still on the cutting edge.”

Apple’s new iPhone was unveiled earlier this month with Siri technology, which lets users ask for weather updates, make calendar appointments or send messages without tapping on the keyboard. The iPhone is the company’s best-selling product.

The latest Android incarnation also offers easier multitasking and a new People app, which helps check status updates from Google+ and other social networks.

Suwon, South Korea-based Samsung’s shares fell 0.6 percent to 878,000 won as of 12:23 p.m. in Seoul. HTC, Asia’s second- largest smartphone maker, fell 2.3 percent to NT$691 at 11:50 a.m. in Taipei trading.

Siri

Android controlled 43.4 percent of the global smartphone market in the second quarter, while Apple’s iOS had an 18.2 percent share, according to researcher Gartner Inc.

Photographer: Jerome Favre/Bloomberg

A member of the media examines the Samsung Electronics Co. Galaxy Nexus smartphone, running Google Inc.'s Ice Cream Sandwich Android operating, system in Hong Kong. Close

A member of the media examines the Samsung Electronics Co. Galaxy Nexus smartphone,... Read More

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Photographer: Jerome Favre/Bloomberg

A member of the media examines the Samsung Electronics Co. Galaxy Nexus smartphone, running Google Inc.'s Ice Cream Sandwich Android operating, system in Hong Kong.

Google offers the operating system for free and then makes money on mobile advertising, which is on pace to reach $2.5 billion on an annual basis, it said earlier this month. Google’s previous iterations of its software for portable devices had names such as Honeycomb, Gingerbread and Froyo.

For tablets, Apple’s iOS dominated with 61.3 percent market share in the second quarter, according to research company Strategy Analytics. Android accounted for 30.1 percent of the tablet market.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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