Samsung to Challenge Apple’s IPad With Own Tablet Computer

Samsung Electronics Co., the world’s second-largest mobile-phone maker, plans to offer a tablet computer to ride the wave of demand it expects for Apple Inc.’s iPad.

“We will respond,” J.K. Shin, president of Samsung’s mobile-communication division, said in an interview last night in Barcelona, Spain. Apple’s tablet computer “will create a new market and new demand,” adding that it’s “too early” to give more details on Samsung’s plans.

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The South Korean company provides the processor that powers Apple’s iPad, according to market research firm ISuppli Corp., putting Samsung in a position of being both a components supplier and a competitor for the Cupertino, California-based company. The iPad, a touch-screen tablet computer, will go on sale by March, Apple Chief Executive Officer Steve Jobs said at the Jan. 27 debut of the device.

“This is normal, we have to compete in the market,” Shin said. “At the same time, they are our customer and we are the supplier of components to them.”

Goldman Sachs Group Inc. estimates that Apple will sell 6 million iPads this year. By contrast, the market for mobile phones will reach 1 billion units and PC sales will be about 300 million. Still, the iPad is a high-profile attempt to crack a market that other companies have set their sights on, according to ISuppli analyst Jagdish Rebello.

Samsung’s tablet computer plans also show how the Suwon, South Korea-based company aims to offer more higher-end mobile devices. The company said on Feb. 14 that it will start offering a 1-gigahertz processor handset, called the “Wave,” as it aims to bolster its smartphone business.

The Wave

The Wave is “key” for Samsung’s plans to expand the company’s smartphone business, Shin said, adding that “this is the biggest challenge we’re facing this year.” The Wave and other new products will help to increase average selling prices, Shin said.

The “Wave” handset is the first one running Samsung’s own Bada operating system. Bada will become a “tough” competitor for operating systems from other companies including Google Inc. and Microsoft Corp, Shin said. Samsung will continue to offer phones with operating systems from other companies “for the time being,” Shin said, adding that the market for operating systems will consolidate in the future.

Samsung earlier this year predicted its handset shipments may grow 19 percent to more than 270 million units in 2010, helped by demand for smartphones. The company, which shipped 227 million mobile phones last year, also aims to triple shipments of smartphones this year from 6 million in 2009.

Market Share

Samsung said Jan. 29 it plans to increase its handset market share this year and achieve a profit margin of at least 10 percent from phones. Smartphones and touch-screen phones will lead growth in developed markets such as North America and Europe, while demand for regular handsets in emerging markets will also recover, Samsung said at the time.

Worldwide sales of smartphones grew 30 percent in the fourth quarter from a year earlier to 53 million units, Boston- based researcher Strategy Analytics said earlier this year.

Nokia Oyj, Research in Motion Ltd., and Apple remained in the top three positions for smartphones, the research company said.

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