Samsung starts sales of Galaxy Note 10.1

SEOUL, South Korea (AP) — Samsung Electronics Co. is taking another shot at the dominance of Apple's iPad with a tablet equipped with a digital pen and a faster processor at the same price tag.

The Wi-Fi only version of the Galaxy Note 10.1 will go on sale in the U.S. on Thursday. The price starts at $499 for the basic model with 16 gigabytes of storage and $549 for the 32-gigabyte model, expandable with an external memory card.

Apple's latest iPad starts at the same price but the Note 10.1 offers some features that the iPad doesn't have, while its screen resolution is lower than the iPad's. It is Samsung's first Android tablet equipped with a digital pen and can run two applications side-by-side on a screen divided in half.

The split screen, made possible by the quad-core processor and 2 gigabytes of RAM, can be useful when taking notes while watching a video or surfing the Internet.

Analysts said this capability of the Note tablet is intended to attract business and education customers, a strategy that could be more effective than going all out against the iPad, which already dominates nearly 70 percent of the worldwide tablet market.

Samsung released about a half dozen Android tablets in the last two years under the Galaxy Tab series but none of them has been as popular as the iPad. Analysts say Android tablets are less successful because of a dearth of applications and higher prices.

But with the Note 10.1, the South Korean company believes it has a product that will find favor with corporations and schools despite the iPad's rich pool of applications and sharper screen.

While Apple makes one new model for the iPhone and iPad every year to meet demand from all around the world, Samsung releases multiple mobile products with variations in prices, screen sizes, hardware and operating systems.

This strategy helped Samsung edge pass Apple in smartphone sales but hasn't paid off in the tablet area, probably because Samsung's previous tablets were not differentiated enough from the iPad. Samsung's second-quarter market share in the global tablet market fell to 9 percent, while nearly seven out of 10 tablets in the market were emblazoned with Apple logo, according to IHS iSuppli.

Analysts say they see how multitasking, the note-taking feature and other tasks that can be done with the digital pen can help differentiate the Galaxy Note 10.1 from the iPad, something that may grab the attention of professional artists, educators and businesses if these features are executed smoothly.

"I think the video on the left and note-taking on the right half of the screen can be widely used for educational purposes," said Lee Sei-cheol, a technology analyst at Meritz Securities.

Samsung has improved the pressure-sensitive pen to make it feel more natural and accurate since the "S Pen" digital pen was first introduced with the Galaxy Note last year. The unexpected success of the 5.3-inch hybrid of a smartphone and a tablet emboldened Samsung to further explore the digital pen features.

There are also some 30 applications for sketching and note taking as well as Adobe Photoshop Touch and games where S Pen comes in handier than touching the screen. Samsung plans to expand the list of applications that support multitasking, which is currently limited to six, an official said.

Other features indicate that Samsung developed the products with the education and corporate markets in sight. The updated S Note app can recognize handwritten math formula, geometric shapes, English alphabets and Chinese characters, allowing the digital pen to function as an input device in the absence of a physical keyboard.

"The S Pen offers both active content creation as well as passive content consumption," President of Samsung Electronics America Tim Baxter said in a statement.

In South Korea, Samsung has already started going after enterprise clients and schools with the Galaxy Note 10.1 and the company has not released the product for consumers.

Samsung Life Insurance and its affiliated insurance company Samsung Fire & Marine Insurance began handing out the Note 10.1 for sales people who are ditching large stacks of paper for the tablet.

Samsung also said it will donate nearly 600 Note tablets to eight South Korean schools for educational use. South Korea is rolling out a $2 billion project to replace paper books with digital texts.