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Smartphone giants scramble for profits in tough market

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Smartphone giants released eye-catching new devices as the world's biggest mobile fair opened Monday, fighting for new ways to profit in a tougher market. 

Visitors arrive at the 2014 the Mobile World Congress centre in Barcelona, on February 23, 2014. AFP Photo / Lluis Gene

Besides a slew of sleek, new premier smartphones, the world's biggest smartphone maker Samsung and its rivals unveiled an array of smart watches and bracelets to unlock new revenues.

The four-day Mobile World Congress in Barcelona, Spain, opens after a deceptively buoyant 2013, when sales surged 42.3-percent to 968 million units.

The growth was powered almost entirely by developing markets, however, disguising a slowdown in mature markets such as Western Europe and the United States, which are the most profitable.

The big buzz at the conference was Samsung's launch Monday of its flagship device, almost certainly a Galaxy S5 smartphone rumoured to be equipped with a fingerprint scanner and larger screen.

The South Korean giant made about 30 percent of all smartphones sold in the world last year, about twice the share of archrival Apple, which traditionally skips the annual industry fair.

But Samsung is nevertheless scrambling for new revenue sources as competition in mature markets intensifies.

Samsung thus launched an updated smart watch, the Gear 2, on the eve of the gathering, adding new features and ditching Google's Android in favour of its own operating system.

Featuring sports tracking software and a heart rate monitor, the Gear 2 marks an important and widely anticipated step towards independence from Android.

But Samsung faces other significant challengers for potential customers' wrists both at home and abroad.

Hours after Samsung launched the Gear 2, rising Chinese smartphone maker Huawei revealed a connected watch of its own.

Huawei, already a major force in building mobile networks and the world number three smartphone maker in 2013, showed off its TalkBand, to be sold for 99 euros ($136).

South Korean manufacturer LG said on the same day that it would launch its first smartwatch in 2014.

Sony revealed its Xperia Z2 smartphone Monday, the first new edition of its flagship device since it announced this month the sale of its stagnant PC business to focus instead on smartphones and tablets.

The waterproof phone, available from March, has a full high definition 5.2-inch screen and a 20.7 megapixel camera that can take ultra-high resolution 4K video, along with noise-cancelling audio.

The struggling Japanese group revealed, too, an Xperia Z2 Tablet, also waterproof, and a more affordable Xperia M2 smartphone.

But Sony Mobile also entered the fray for wearable devices, releasing the SmartBand SWR10, a bracelet that comes with an application allowing users to log events and photographs taken during the day as well as tracking how far they walk and checking their sleep cycle.

"Our SmartWear experience goes far beyond health and fitness," Sony Mobile chief executive Kunisama Suzuki boasted.

- Zuckerberg is star speaker -

At the same time, the online world is elbowing its way into the mobile market.

Facebook's 29-year-old founder Mark Zuckerberg is the star speaker on the opening day of the fair in Barcelona, fresh from his $19 billion (14-billion-euro) takeover of smartphone messenger WhatsApp.

He has come a long way in the mobile world in a short time.

When Facebook sold its shares to the public in an initial public offering in May 2012, "it literally had no mobile advertising revenues," said Eden Zoller, analyst at the research house Ovum.

"It did actually have a pretty strong mobile user base at IPO but what it had failed to do at that time was actually monetise those mobile users," she said.

But the social network -- boasting more than 1.2 billion members -- quickly repaired its strategy.

By the end of 2013 mobile devices accounted for 53 percent of Facebook's advertising revenue, bringing in $1.2 billion in the last quarter and more than $3 billion over the whole year.

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