Samsung eyes early launch of bada-phone

SUWON, South Korea (Reuters) - Samsung Electronics plans to launch the first smartphone based on its own operating system in the next few weeks, as it seeks to catch up with bigger rivals in the booming high-end market.

"You need a proprietary system to drive growth in the smartphone market and bada will do the job, as it is designed to support all segments from low to high end," Lee Ho-soo, head of Samsung's smartphone operating system, told the Reuters Global Technology Summit on Wednesday.

Bada, which means ocean in Korean, is at the heart of Samsung's drive to emulate success by the likes of Apple and RIM in the smartphone market, develop new revenue sources from its own Samsung App store, and create synergies with other businesses such as its TV business, which is the world's biggest.

But it is still a daunting task to attract third-party developers as Samsung is not yet a big player in smartphones and its volume is also diluted by its multiplatform strategy.

Samsung also has to quickly boost its small pool of software bells and whistles to rival firms such as Apple, which boasts more than 200,000 iPhone apps, and needs to crack into the U.S. market, where carriers show little interest in its bada phone and are increasingly adopting popular Android models.

"We have a very strong response from application developers... and we see strong potential in bada to become a major operating system," said Lee, who took charge of Samsung's Media Solution Center two years ago to develop its own smartphone system.

Lee said Samsung planned to launch Wave, its bada-based high-end model, in coming weeks in Britain and Germany and also open its own applications store in June to provide contents for its bada smartphone users.

THE OCEAN OF OPPORTUNITY OR CHALLENGES?

Samsung is the world's No.2 mobile phone market with around 20 percent market share but it has a little traction in the smartphone market and is making a big push to treble smartphone sales to around 18 million units this year.

Asian technology firms vying for a bigger share of the smartphone market also face an uphill battle after Hewlett-Packard snapped up Palm.

Unlike Apple and RIM, Samsung supports multi-operating systems such as Symbian, Windows and Android and added bada, hoping its developer partners see the wide opportunity offered by the world's No.2 handset maker, which sold 227 million phones last year.

Samsung plans to introduce one third of its smartphone offerings this year with the bada system but Lee, who joined Samsung in 2005 after 20 years with IBM, said it had no immediate plan to open its operating system to other manufacturers such as Nokia to boost its market share.

"We have no such plan and bada is rather aimed at offering a unified platform for a wide range of products we offer such as TVs and computers," Lee said.

"Bada is also aimed at offering customized products for carriers and consumers and thus it will help us achieve broad-based shipment growth in smartphone market as it gets bigger."

Analysts have however cautioned that rising competition may pose a threat to Samsung's ambition, as non traditional handset vendors such as computer makers enter the market and as Samsung has a long way to go to catch up in building contents.

Nine main operating systems have either launched or are in development, underscoring the increasing fragmentation likely within this market.

"Markets will continue to remain fragmented and competition will only get tougher as players will push hard to develop new system or upgrade existing ones to offer customized products for mobile carriers," said Lee.

Android phones, which Google says are sold 65,000 units every day, are likely to nearly triple its market share this year to 11 percent, according to UBS.

(Editing by Anshuman Daga)