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Sony Plays Tablet Catchup
Haruyoshi Yamaguchi/Bloomberg
The Sony Corp. S1, left, and S2 tablet personal computers are displayed at an unveiling in Tokyo, Japan, on Tuesday, April 26, 2011.
The Sony Corp. S1, left, and S2 tablet personal computers are displayed at an unveiling in Tokyo, Japan, on Tuesday, April 26, 2011. Photographer: Haruyoshi Yamaguchi/Bloomberg
Sony Corp. (6758) and LG Electronics Inc. (066570)
will showcase tablets and handsets while Samsung Electronics Co.
tries to steal a march on Apple Inc.’s next iPhone model at
Berlin’s annual consumer electronics fair this week.
Seoul-based LG, the third-biggest maker of mobile phones,
will show its Optimus 3D handset that can connect to televisions
and double as a games controller at IFA. Tokyo-based Sony, the
last electronics giant to bring tablets to the market, may
unveil prices for its first two models, including a compact
foldable tablet that can download PlayStation Suite games.
IFA, previously a showcase of home appliances from TVs to
fridges, has become a battleground for manufacturers to woo
European consumers to wireless gadgets. Sales of smartphones
that allow users to watch live sports events and play games will
rise 56 percent to 468 million units this year, making them one
of the few bright spots of the consumer electronics market,
estimates by Stamford, Connecticut-based Gartner Inc. show.
“Competition is intense, market shares are in flux and
that means companies have to try to make an impression on
consumers,” said Antje Stobbe, head of technology research at
Deutsche Bank AG in Frankfurt. “It’s important to position
yourself in these markets because they are the future.”
Falling demand for games consoles and TVs have forced
Nintendo Co. and Sony to cut prices and slash profit forecasts.
Royal Philips Electronics NV earlier this year ceded control of
its 80-year-old TV unit to Hong Kong-based TPV Technology Ltd.
Fighting IPads
Products introduced at last year’s IFA included Samsung’s
Galaxy Tab and Toshiba Corp.’s Folio 100 tablet computer. While
those products have helped win some customers in a tablet market
that is set to triple in value to $30.6 billion this year, Apple
will dominate with a share of 73 percent by value, compared with
88 percent in 2010, according to Strategy Analytics estimates.
Samsung, Apple Inc. (AAPL)’s biggest competitor in smartphones and
tablets, and HTC Corp. (2498), Asia’s second-largest maker of handset
with computer-like features, will showcase next-generation
handsets in Berlin to grab consumer attention before Apple
unveils its iPhone 5.
A link on Windows Phone’s Facebook page to HTC events in
Berlin and London has fueled expectations that the devices the
Taiwanese company will unveil this week will run on Microsoft
Corp. (MSFT)’s Windows Phone operating system. Susanne Nguyen, an
external spokeswoman for HTC in Munich, declined to comment.
Samsung vs HTC
Apple, whose Chief Executive Officer Steve Jobs announced
his resignation last week, traditionally doesn’t attend the IFA
exhibition. The iPhone, introduced in 2007, has become Apple’s
best-selling product and turned the company into the world’s
largest smartphone maker.
“In the mid-term they are going to defend the position,
but the others are coming up quite fast in terms of quality and
in terms of variation as well,” said Wafa Moussavi-Amin, a
Frankfurt-based managing director of researcher IDC.
The Saturn electronics store in Frankfurt’s main shopping
street Zeil illustrates the stiff competition. Of the 14 Samsung
smartphones on display, six cost less than 200 euros ($288)
without contracts. The store carries 10 HTC smartphones, two
selling for less than that price. Nokia Oyj (NOK1V) and Sony Ericsson
had 12 devices on display, while LG had four.
HTC is targeting consumers such as Tim, a 16-year-old high
school student from Frankfurt, who is considering a replacement
for his iPhone 3GS phone.
Young Customers
“If I look at my iPhone 3GS and compare it with today’s
HTC phones, it’s clear how far ahead the HTCs are, and that in
such a short timeframe,” said Tim, declining to give his last
name, as he browsed for a new device at Saturn. “It helps that
they update their models so frequently. If I had to choose
between the iPhone 4 and a HTC phone, I’d go with HTC.”
Samsung, which is stepping up the creation of applications
for its Bada software used on lower-priced smartphones, last
week introduced phones to target emerging markets and younger
consumers. In the same week, Nokia unveiled three mass-market
smartphones starting at 180 euros.
Huawei Technologies Co. is also taking aim at entry-level
users with a prepaid version of its Ideos X3 smartphone that
will go on sale at German discount store Lidl this week for
99.99 euros.
“Their target is to get a huge market share of the still
growing smartphone market,” Klaus Boehm, director of media at
Deloitte in Dusseldorf, said in an interview. “They need to
position themselves with young consumers that are not interested
in huge mobile contracts.”
Shares Fall
Shares of Samsung have fallen 22 percent this year. HTC has
dropped 11 percent, LG has lost 46 percent of its value, while
Sony has tumbled 42 percent. Apple has risen about 20 percent.
Sony presented its two tablet models, code-named S1 and S2,
in April, a year after the iPad spurred a surge in demand for
the devices. As a latecomer to the tablet market, Chief
Executive Officer Howard Stringer plans to differentiate from
rival devices by adding the ability to download PlayStation
Suite games, movies and music from its subscription services.
Sylvia Shin, a U.K.-based spokeswoman for Sony, didn’t
return calls seeking comment.
Demand for the S1 tablet could be curtailed if it’s priced
too high, Jeff Loff, an analyst at Macquarie Group Ltd., wrote
in a note yesterday, citing a price level of $600. Apple’s iPad
2 costs from $499 on the apple.com store.
To contact the reporters on this story:
Ragnhild Kjetland in Frankfurt at
rkjetland@bloomberg.net;
Cornelius Rahn in Frankfurt at
crahn2@bloomberg.net
To contact the editor responsible for this story:
Kenneth Wong in Berlin at
kwong11@bloomberg.net
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