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Technology

Samsung launches Note 10 to fend off Huawei challenge

Korean giant aims to boost flagship sales with new mobile and Microsoft link

Samsung's unveiling of the Note 10 came two days before Huawei is expected to reveal its own smartphone operating system.   © Reuters

NEW YORK -- Samsung Electronics on Wednesday unveiled two new smartphones in its Galaxy Note series, in new bid to pique consumer interest in its flagship products as well as to ward off a challenge from China's Huawei Technologies.

The South Korean giant launched the Note 10 and its larger companion 10+ in New York, a week after its mobile division reported a declining operating profit, citing sluggish demand in the premium handset market.

Samsung's new premium device will be a key weapon in its battle against Huawei, which on Friday is widely expected to reveal its own operating system. Huawei remains on Washington's export ban list, which has left its new phones without system updates from Google's Android.

The two giants will also meet head-to-head next month when both relaunch foldable devices. Samsung's Galaxy Fold and Huawei's Mate X were introduced months ago but put on hold to improve reliability; the Fold reported screen glitches back in April.

Samsung's Note 10 and 10+, featuring 6.3-inch and 6.8-inch displays, start at $949 and $1,099 respectively. They come with optional 5G connectivity. This is the first time the Note comes in two sizes, allowing more choices for increasingly picky customers.

The Note 10, with a 3,500mAh battery and super fast charging, is positioned as a device for power users, from video content creators to business executives who need to work on the go. The handsets will hit the market on Aug. 23, with preorders starting Thursday.

The Note 10 follows Apple's iPhone in ditching the headphone jack.   © Reuters

Koh Dong-jin, CEO of Samsung's mobile division, on Wednesday also touted the brand's security, in an apparent jab at Huawei, which the U.S. has deemed a national security risk.

"At Samsung, we know the foundation for trust is security." Koh said onstage. "We deliver multilayers of security that is recognized by governments around the world."

In recent years, Huawei has rapidly closed in on Samsung in mobile devices. In the second quarter of this year, it captured 17.6% of the market to Samsung's 22.7%.

As the Chinese smartphone maker struggles to navigate the U.S.-China trade war, Samsung now also has its own trade headwinds to worry about, with Tokyo moving to restrict exports of high-tech materials to South Korea amid an ongoing trade spat.

Meanwhile, Samsung's semiconductor business continues to suffer due to weak demand, and its mobile division now has to play an even more crucial role in driving up the company's financials. However, prolonged upgrade cycles of smartphones in recent years have especially hurt the sale volumes of higher priced devices, which bring in larger margins.

Earlier this year, Samsung launched its flagship Galaxy S10, its first ever device to have a 5G version, but sales were underwhelming.

"S10/10+ was not a blockbuster," Marta Pinto of market research firm IDC said ahead of Wednesday's launch event. In recent years, Samsung's premium smartphones have not "performed in an outstanding way, so every announcement is a promise of the next 'great big thing.'"

The Note 10 "is a niche device for ultra productive users," said Pinto, who tracks smartphone shipments. But "Samsung now has two different 5G models in the market and that gives them an early entrant advantage."

At the event, Samsung also announced a partnership with Microsoft to offer integration between a Galaxy phone and Windows 10 PC that allows users to check notifications, send and receive messages, and transfer files without pausing to look down at their phone.

Samsung mobile CEO DJ Koh, left, and Microsoft CEO Satya Nadella, are trying to "create the same kind of stickiness that iPhone and Mac have," an analyst says.   © Getty Images

The collaboration marks "a profound shift in how we interact with the many devices in our lives," Microsoft CEO Satya Nadella, who made a cameo at the event, said onstage.

Carolina Milanesi, an analyst at market research firm Creative Strategies, said the partnership could be an opportunity for the two companies to "create the same kind of stickiness that iPhone and Mac have" for a larger user base than Apple's.

In the context of longer upgrade cycles, thinking about linking its smartphones to other devices and driving productivity for users could help Samsung drive up price points and therefore profitability, Milanesi added.

Along its mobile devices, Samsung also introduced the Galaxy Book S, a Qualcomm and Windows 10-powered laptop with LTE connection and up to 23 hours of battery life.

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