Samsung Said to Introduce Watch-Like Phone Next Month

Samsung Electronics Co. (005930) will introduce a wristwatch-like device named the Galaxy Gear next month that can make phone calls, surf the Web and handle e-mails, according to two people familiar with the matter.

The Galaxy Gear will be powered by Google Inc. (GOOG)’s Android operating system and go on sale this year to beat a potentially competing product from Apple Inc. (AAPL), the people said. The device will be unveiled Sept. 4, two days before the IFA consumer electronics show begins in Berlin, one of the people said, asking not to be identified because the plans are private.

“It will carve a niche for sure as this is an initial product in the market,” said Chung Chang Won, an analyst at Nomura Holdings Inc. in Seoul. “Wearable devices could be one of the trends in the smartphone market, but I’m not sure yet whether watches or glasses will set the trend.”Asia’s biggest technology company is racing other electronics makers, including Sony Corp. (6758), to create a new industry of wearable devices as the market for top-end handsets nears saturation. The global watch industry will generate more than $60 billion in sales this year, and the first companies to sell devices that multitask could lock customers into their platform, boosting sales of smartphones, tablets and TVs.

The Galaxy Gear being released next month won’t have a flexible display, though the company is continuing to work on developing a bendable screen, one person said. It will be unveiled the same day as Samsung’s Galaxy Note 3, a combination smartphone and tablet computer.