Samsung to assault Apple with ads, products

Samsung said it would take on Apple in music last year. Not much happened. Now, it says 2006 will be the year.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
3 min read
LAS VEGAS--Electronics giant Samsung said Apple Computer will feel the heat this year.

Samsung last year publicly vowed to take away Apple's top spot in music players by 2007. This year, the South Korea-based company will kick off that effort with a slew of products and large ad campaigns, Peter Weedfald, senior vice president of consumer electronics for Samsung's North American division, said during an interview last week at the Consumer Electronics Show here.

Macworld Expo, Apple's opportunity to be in the spotlight, begins this week.

"What's the difference between how they have gone to market and how we have gone to market? It's real simple. They spent $165 million last year to advertise Apple MP3 products. We spent $1 million," Weedfald said. "We are going to break the code. In 2006, we are going to over-invest in advertising and marketing around these really hot, new digital video and digital audio products, and we will spend tens of millions of dollars."

Several companies have tried to knock Apple off its perch, with only limited success. Samsung, however, has tools that might help it put up a spirited attempt. It is one of the largest tech companies in the world and has several labs and designers.

In North America, consumer electronics revenue came to $17 billion in 2005. It will likely grow to $20 billion in 2006, a 16 percent increase.

Apple has maintained a distant lead in the MP3 market. So to gain market share, Samsung said it will issue a broad array of products, some of which it expects to become breakaway hits. That's how the company became a top player globally in cell phones.

In North America, Samsung will launch more than 180 new products or upgrades to existing products, according to Weedfald. For over a year, it has released a new cell phone in North America every two weeks, he said.

"The moniker we want to be known for is as a jaunty, flinty, spirited technology leader," he said. "The way you have to do that is continue to come out with technology breakthroughs."

Many of the company's music players will sport dual functionality. The Helix and Nexus MP3 players, unfurled at CES, come with an integrated XM satellite radio receiver. The devices took about four and half months to concoct from conception to final product, Weedfald said.

Other products will combine a portable TV with a music player.

Samsung will also try to jumpstart the portable video market this year. Some portable video devices will be primarily video players, while others will be phones or MP3 players first.

"Videoconferencing is one of the biggest applications on the planet. Video will be a huge application across all of these pieces of glass," Weedfald said. "It has been very difficult and painful to watch editors get excited about Apple's video products when we've had those products seven, eight months earlier, when (Apple CEO) Steve Jobs was denying he was interested in that."

The willingness of Hollywood studios to finally release downloadable movies and TV shows--downloads that might get swapped around personal networks--could also help jumpstart this market. Video devices will, in turn, help movie studios, Weedfald said. Right now, studios release movies to theaters and release the DVD months later.

"How much DVD sales is Hollywood losing because they are delaying the release by four to five months? They want to release the DVD when the movie is out, at the Valhalla or peak of interest," he said. "For them to speed that up, they need devices where you can buy 'King Kong' the day after you see it."

Apple, he added, deserves some credit for getting content providers to embrace digital technologies.

"Apple did something smart. What they said was, 'You have the show "Desperate Housewives," and you spend maybe a million to produce one episode. That thing is going to sit on a shelf for a year or two until it goes into syndication or DVD. What if the next day, Mr. ABC, after you've made money on advertising, I could take the fresh lettuce of content and sell it the next day for $1.99 and give you back $1.50?' And someone at ABC says...'That's a good idea.'"