Samsung Electronics Co unveils the second generation of its popular Galaxy Note phone-cum-tablet at Europe's biggest electronics show in Berlin later on Wednesday, as the South Korean firm comes under pressure to innovate after losing a U.S. patent battle with Apple Inc.
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A U.S. federal jury last week found Samsung had copied critical features of the iPhone and awarded Apple (AAPL) $1.05 billion in damages. Apple is now seeking speedy bans on the sale of eight Samsung phones, moving swiftly to turn legal victory into tangible business gain.
The Galaxy Note phablet, Samsung's second most popular smartphone after its flagship Galaxy S, is not included in the list of the potential U.S. sales ban, and Samsung hopes the phablet upgrade will lift any post-Apple gloom at the South Korean group.
"There won't be huge innovative changes in design, but the Note 2 will feature quite a few improvements and enable Samsung to carry on its strong sales momentum in the category," said Lee Sun-tae, an analyst at NH Investment & Securities. "With the launch, Samsung will also be trying to turn around downbeat sentiment after the U.S. legal defeat."
The new version of the Note is expected to feature a thinner and slightly bigger 5.5-inch screen, powerful quad-core processor, the latest version of Google's Android operating system called Jellybean, and improved stylus function.
It's the latest product to illustrate Samsung's attempts to make bold design changes as it comes increasingly under pressure to differentiate its line-up from the iPhone, whose simple and large touchscreen-based design revolutionized the mobile industry and is still considered the gold standard of design.
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Samsung is also working to introduce smartphones with bendable screens later this year as it seeks to cement its lead in the $200 billion plus global smartphone market and challenge Apple, which is expected to launch its new iPhone on September 12.
The new Note comes just three months after Samsung released the third generation of its Galaxy S smartphone, which has already sold more than 10 million, and succeeds the original 5.3-inch Note, which was introduced in late-October and was a surprise hit, selling more than 10 million within 9 months.
Other firms that offer so-called phablets include LG Electronics and HTC. ABI Research has predicted phablet shipments could reach 208 million by 2015.
Unlike Apple, Samsung depends on various line-ups, offering a range of models in different sizes and with different software, and keeps its product cycle shorter. Later this year, it is expected to launch a new model running Microsoft's upgraded Windows operating system.
Samsung shares rose 2.9 percent to 1.23 million won in Seoul on Wednesday - in a broader Korean market that closed up 0.6 percent - and are now down just 3.5 percent from their levels before last Friday's U.S. ruling. The shares slumped 7.5 percent on Monday, wiping $12 billion off the company's market value.
A U.S. judge on Tuesday set a December 6 court date to hear Apple's request for a permanent injunction against Samsung smartphones, which could delay the potential impact of Apple's legal victory. Also, ratings agency Standard & Poor's said Apple's bruising legal win had not affected the agency's ratings on Samsung.
(Reporting by Miyoung Kim; Editing by Ian Geoghegan)