Three-sided smartphone tipped from Samsung

Banners advertising Samsung Electronics' Galaxy Note 4 are displayed at a Samsung shop in Seoul. The company is tipped to be building a 3-sided smartphone. Photo / AP

Samsung Electronics plans to release two new versions of its top-tier Galaxy smartphone next month, including a model with a display covering three sides, according to people with direct knowledge of the matter.

Both phones will have all-metal bodies and use Samsung's most advanced processor chips, the people said, asking not to be identified because the details haven't been released. The second model to be unveiled at the Mobile World Congress in Spain will only have a front-facing display, the people said. Both phones will have 5.1-inch screens, one of the people said.

Samsung has been stung by Apple's new iPhones, ceding global market share after the larger-screen devices captured sales in a segment pioneered by the Galaxy S lineup. Asia's biggest technology company is using its skills in displays and chips to recapture its innovation edge and revive earnings that have slumped for three straight quarters.

"Samsung need a model with new technology to stop the iPhone juggernaut and to distinguish it from others," said Lee Sang-hun, a Seoul-based analyst at HI Investment & Securities Co. "Although Samsung is continuing to release cheaper models globally to defend its market share, the next S phone is more important because that's where they make money."

The company unveiled its first device with a multiple-sided screen last year with the Galaxy Note Edge, a 5.6-inch phone with a display stretching down the right side so users can read messages and news from an angle.

One of the new Galaxy phones will have a screen that covers the front and both the left and right sides, the people said.

Samsung declined to comment on its phone specifications in an email.

The new Galaxy phones, developed under the "Project Zero" codename, will use metal frames supplied by BYD Electronic International Co., one of the people familiar with the matter said. That is a subsidiary of BYD Co., the Chinese automaker partially owned by Warren Buffett's Berkshire Hathaway Inc.

Shares of Samsung fell 1.7 per cent in Seoul on Wednesday. The stock has risen 2.1 per cent this year. BYD Electronic surged 4.6 per cent in Hong Kong, the biggest gain in two weeks.

Samsung hinted at a wraparound screen in invitations this month to a March 1 unpacking event in Barcelona ahead of Mobile World Congress, the same event it chose last year to unveil its Galaxy S5. Sales of the S5 failed to match those of its predecessors.

The emailed invitations included the statement "What's Next" under the image of a curved line that resembles the shape of the Note Edge and its wraparound screen. The February 3 invitations didn't name the new product.

"Note Edge was received better in the market than I had expected as people found it quite useful to do multitasking," said Lee Seung-woo, an analyst at IBK Securities Co. in Seoul. "The ultimate goal of Samsung is to make a truly foldable device at some point and the dual-edge screens will help it draw more attention from device makers to its most advanced display technology."

Samsung lost its lead in the global smartphone market last quarter as Apple rose into a tie as the biggest producer. Both companies shipped 74.5 million smartphones in the December quarter for 19.6 per cent of the market, Strategy Analytics said Jan. 29.

Apple's iPhone 6 and 6 Plus have gained in the world's largest market of China, where consumers want a bigger device to perform the role of a phone and tablet computer.

That has squeezed Samsung as it struggles to differentiate itself from Chinese vendors, including Xiaomi and Lenovo Group , that offer feature-packed devices using Google's Android, the same software that powers Galaxy phones.

Samsung plans to use its own microprocessors in the next Galaxy S, dropping a Qualcomm Inc. chip that overheated during the Korean company's testing, people with direct knowledge of the matter said last month.

With Apple, Xiaomi and Lenovo. winning customers, Samsung's earnings have slumped.

Net income, excluding minority interests, plunged 27 per cent to 5.29 trillion won in the fourth quarter. Operating profit at the mobile-phone unit slumped by almost two-thirds to 1.96 trillion won and the business was overtaken by chips in the third quarter as Samsung's biggest profit driver.