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Samsung scrambles to fend off Huawei with content tie-ups

All-day battery and Bluetooth-linked pen among new features to debut Aug. 24

The Galaxy Note 9 with the Bluetooth-enabled S Pen, which can serve as a remote control for the device   © Kyodo

NEW YORK -- Samsung Electronics unveiled its latest Galaxy Note smartphone on Thursday, strengthening its music service in partnership with Spotify amid intensifying competition from U.S. rival Apple and Chinese manufacturers.

The tie-ups indicate that Samsung is eager to nurture its relatively weak content services in cooperation with the specific players, shifting focus beyond being just a strong hardware manufacturer.

The South Korean company introduced its large-screen Note 9 to the media at Barclays Center in the New York City borough of Brooklyn, installing an all-day-long battery and adding a Bluetooth link to its stylus pen. The new flagship model will be released on Aug. 24, weeks earlier than previous iterations, an apparent move to draw customers before Apple's new iPhones hit the market in the fall.

Samsung's new device comes as the world's largest smartphone maker faces cutthroat competition from Chinese players in an increasingly saturated market. Huawei Technologies surpassed Apple in the second quarter, becoming the No. 2 smartphone brand in the world, according to Counterpoint Technology Market Research.

The Chinese company said last week that it would dethrone Samsung by the end of next year, becoming the world's top smartphone seller by volume. Samsung topped the list of global smartphone shipments with 71.6 million units in the second quarter, down 11% from a year earlier. But Huawei's shipments jumped 41% to 54.2 million during the period, narrowing the gap with Samsung.

Samsung is expanding its partnerships with content companies as part of its strategy to stay out in front of competitors. With the launch of the Note 9, the company is making it easier to listen to music on the Swedish streaming service Spotify. Spotify registration will be part of the setup process of the new Galaxy Note, solidifying it as the preferred music supplier on Samsung devices. 

The company said that the new phone also offers map and reservation services through partnerships with Google Maps and Yelp. Samsung said the Note 9 opens up a world of possibilities, playing the role of a portal to the full ecosystem of the company's devices and services.

"It will take open systems and open partnerships to unleash the power of technology so that you can reimagine how you connect, create, work, play and live," Samsung CEO Koh Dong-jin said at his keynote speech at the event in New York.

"It's time for a new generation of experiences that are intelligent enough to anticipate your needs," Koh said.

Samsung still invests in hardware innovation, planning to launch a foldable smartphone early next year to mark the Galaxy series' 10th anniversary. The new phone will work like a tablet when unfolded and be even more portable when folded up. The company said it is in the final stages of the product's development, working on a software environment optimized for folding and on a durable display.

The Galaxy Note 9 will be released weeks earlier than previous new models in an apparent attempt to beat Apple’s new iPhones to the market. (Photo by Emily Hey)

Analysts say that Samsung needs to pay more attention to the Chinese market if it wants to keep its lead. The company's once-double-digit share in this key battleground fell to 1% in the first quarter, down from 3% a year earlier and 8% in the first quarter of 2016.

"Samsung needs to pay more attention to China," said Carolina Milanesi, an analyst at U.S.-based market researcher Creative Strategies.

"Chinese consumers are very tech-focused. Samsung needs to try to push more to intervene in the Chinese market," Milanesi said.

Samsung acknowledges the problem and takes Chinese players' growth seriously.

"Samsung executives feel threatened by Chinese companies," said an industry source familiar with the matter, requesting anonymity. "They know that Chinese companies are just one step behind them."

The company also said the phone runs for 24 hours on a full charge thanks to its 4,000 milliampere-hour battery, the largest in the flagship Galaxy line. Samsung also expanded storage with the Note 9, offering two options -- 126 gigabytes and 512 GB. The storage can be expanded to 1 terabyte by inserting a micro SD card.

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