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Samsung hopes to ride the iPad wave with its own tablet computer

J.K. Shin, head of Samsung’s mobile communications divisions, spoke during a press conference yesterday at Mobile World Congress in Barcelona. J.K. Shin, head of Samsung’s mobile communications divisions, spoke during a press conference yesterday at Mobile World Congress in Barcelona. (Associated Press)
By Simon Thiel and Kevin Cho
Bloomberg News / February 15, 2010

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BARCELONA - 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,’’ said J.K. Shin, president of Samsung’s mobile communication division. Apple’s tablet computer “will create a new market and new demand,’’ he said, adding that it’s too early to give more details on Samsung’s plans.

The South Korean company provides the processor that powers Apple’s iPad, according to the market research firm ISuppli Corp. - putting Samsung in the position of being both a components supplier and a competitor for the Cupertino, Calif.-based company.

The iPad, a touch-screen tablet computer, will go on sale by March, Apple chief executive 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. 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 an ISuppli analyst, Jagdish Rebello.

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

The Wave is key to 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 that runs 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,’’ he said, adding that the market for operating systems will consolidate in the future.

Earlier this year, Samsung predicted that 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.

On Jan. 29, Samsung said 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, the Boston-based researcher Strategy Analytics said recently.

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