By Rhee So-eui and Miyoung Kim
SEOUL (Reuters) - Samsung Electronics Co Ltd, the world's No. 2 cellphone maker, aims to treble smartphone shipments and accelerate a strategy to boost software tools in a market dominated by Nokia phones, iPhone and Blackberry.
South Korea's Samsung and its home rival LG Electronics Inc, which together corner more than 30 percent of the global cellphone market, face a major challenge to muscle into the fast-growing smartphone market.
On Thursday, Samsung raised the stakes as it carve out a plan to aggressively promote phones based on its own, little-known Bada platform, as well as offer phones running on Google's Android, Microsoft's Windows Mobile and LiMo's Linux.
"There'll be a big change in our smartphone strategy this year," Shin Jong-kyun, head of Samsung's mobile division told reporters.
"We plan to strengthen our smartphone business this year by not just improving hardware offerings but also beefing up content, applications, services."
Nokia sells more smartphones than any of its rivals, with 39 percent market share. Apple and RIM control 14 percent and 20 percent respectively of a market estimated at 174 million units last year, according to research firm StrategyAnalytics.
Samsung has only about 3 percent and sold around 6 million smartphones last year under such brand names as Omnia and Galaxy.
It aims to treble shipments this year to more than 18 million phones, helping it raise overall selling prices of its cellphone portfolio.
In the broader handset market, Samsung, which sold 227 million mobile phones last year, said it aimed to grow faster than the broader market by selling 260-270 million this year.
Smartphones, with advanced mobile Internet and networking functions, have been the one bright spot in an otherwise depressed handset market last year and are set to become the fastest-growing sub-segment in the overall handset sector this year.
SCEPTICAL ON BADA
Samsung unveiled an Android-based smartphone on Thursday, which will go on sale in the domestic market in late February or early March. It also said a Bada-based phone will debut in late March or April.
Android is generally viewed as a more viable and competitive mobile operating system to fight against Apple's iPhone, the industry's top profit generator, as it has the potential to create a large application store, thanks to Google's brand, advertisements and investment.
Shipments of Bada-based products are set to increase sharply but the company did not give a detailed break-down.
Samsung's own platform will not become a system that other manufacturers will want to adapt, said Oh In-bum, an analyst at Dongbu Securities.
"It will be more like a platform that works like the operating system in feature-centric phones. Samsung will try different operating systems from Android to its own and drop whatever won't work," Oh said.
Analysts expect Samsung's smartphone lineup to focus on Android phones in the first half.
Applications are becoming a key element for companies as more and more consumers base their purchases on the availability and variety of software offered.
Its strategic change comes as Choi Gee-sung took over as Samsung's new chief executive in December, after a successful carrier in building the company's strong mobile phone marketing.
Nokia cut phone prices across its portfolio in late January and launched free satellite navigation to boost smartphone sales, putting its cheapest smartphones on a collision course with mid-ranged phones from rivals Samsung and Sony Ericsson.
Shares in Samsung were flat in a steady broader market.
(Editing by Jonathan Thatcher and Anshuman Daga)
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Last updated: 04 February 2010, 14:27
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