Samsung aims to solidify new device category with Galaxy Note 2 release

Company hopes the new version of its hybrid device will sell three times faster than the first version

Facing stiff competition but aiming for aggressive sales goals, Samsung Electronics Wednesday in Korea released the Galaxy Note 2, its new smartphone-tablet hybrid, and said it will follow up with international launches over the next month.

The South Korean electronics maker will roll out the device in 128 countries through 260 carriers, releasing it in the U.K. in early October and in the U.S. later that month. The company did not disclose specific release dates for other countries.

Samsung launched the first Galaxy Note in February and unveiled the Galaxy Note 2 at the IFA consumer electronics show in Berlin in August.

The Galaxy Note 2 will live up its predecessor's reputation for having created a unique category of smart mobile device, said J.K. Shin, head of Samsung's mobile business, in a statement.

 

The device is about 5.9 by 3.2 inches, slightly taller and slimmer than the previous version, and weighs about 6.5 ounces. It sports a 5.5-inch, super AMOLED display with a 1280-by-720 pixel resolution, and it runs on a 1.6GHz, quad-core Exynos processor.

The device includes a 3100 mAh battery that can power 16 hours of talk time. The supersized smartphone comes in 32GB and 64GB versions, priced at 1,090,000 won and 1,150,000 won, respectively (about US$970 and $1,026). This makes it the most expensive smartphone in Korea. The company did not reveal pricing for the rest of the world.

Compared to the older version, the updated stylus, or S Pen, is designed to be longer and thicker for a better grip, and offers more functions. For example, users can preview an email, calendar or video by hovering the pen over it. Pushing a button on the pen allows users to create screen captures of text or photos and share them via email or text message.

Samsung is aiming for its newest device to sell three times faster than the previous one in the first quarter of its release, Shin said during a press conference.

Analysts have mixed opinions on the Korean company's attempt to define a new category the way Apple introduced a new genre of tablet with the iPad.

"Galaxy Note 2 is not strong enough to draw new users; it could cannibalize Galaxy S III sales," said Lee Sun Tae, an NH Securities and Investment analyst, who said he views the device as a gadget with no particular identity.

The device, somewhat disparagingly called a "phablet" by some market watchers, will likely compete with the latest smartphones with 5-inch screens, including LG's Optimus G as well as mini tablets such as Google's Nexus 7.

"Samsung's 20 million sales target is an aggressive marketing strategy and it's to be seen whether it will increase the subsidy to lower the price," Lee said.

Some analysts, however, said there is a niche for the device.

"Galaxy Note might appeal to people who use it for work, [people] who want productivity and usability as well as portability and convenience," said Scott Bicheno, a London-based analyst with Strategy Analytics.

Samsung has sold about 12 million Galaxy Note devices globally since its launch and the Galaxy S III smartphone topped 10 million within two month of its release, according to Strategy Analytics. Most recently, Apple's iPhone 5 sold more than 5 million in its first weekend on sale.

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