Samsung hopes its new $1,000 Galaxy Note 9 will grab iPhone users and reverse disappointing sales

Key Points
  • Samsung launched the Galaxy Note 9.
  • It has a huge 6.4-inch screen and there is a version with 512GB internal storage, twice that of Apple's iPhone X.
  • The price of the Note 9 is $999.99 for the 128GB storage option and $1,249.99 for the larger model.
Samsung just unveiled its new top-of-the-line phone, the Galaxy Note 9
Samsung just unveiled its new top-of-the-line phone, the Galaxy Note 9

Samsung hopes its new $1,000 Galaxy Note 9 will grab iPhone users and reverse disappointing sales.

The Galaxy Note 9 features one of the biggest screens and internal storage sizes on the market, along with one of the highest price tags to match its high-end specs.

The South Korean electronics giant is looking to target high-end users, in addition to luring consumers away from Apple's iPhone X.

There will be two versions of the device — one with 128GB internal storage and one with 512GB storage, or twice the iPhone X's storage. The smaller storage option starts at $999.99 while the larger one has a $1,249.99 price tag, which puts it above the most expensive version of the iPhone X.

The Note 9 comes with a 6.4-inch screen, one of the biggest on the market, and Samsung's S Pen, a stylus for doodling or taking notes.

Samsung's launch comes at a time when the company's mobile division has been struggling. Operating profit in its mobile unit in the second quarter fell, and it's facing more competition, particularly from Chinese Android rival Huawei, which has recently become the world's second-largest smartphone maker by market share, moving ahead of Apple.

The Note series of devices has never been a huge seller by volume but is an important category for Samsung because of the higher margin. Analysis firm Counterpoint Research estimates that there are over 100 million users with one of the company's flagship devices such as the Galaxy S9 or S8. Those are the users Samsung would want to persuade to upgrade to the new Note 9.

Samsung Galaxy Note 9
CNBC | Magdalena Petrova

"But it could also attract some competing Android users or dissatisfied iOS users [who are unhappy] with battery life, limited storage, smaller screen size or less exciting software experiences," Neil Shah, a research director at Counterpoint Research, told CNBC by email.

'Fortnite' on Android

Samsung will be hoping its key features, like the S Pen, will make its device to stand out against the competition.

Other key features include:

  • Samsung's claim of all-day battery life.
  • S Pen stylus with Bluetooth so you can use the button on it to take selfies, change music tracks and use certain apps.
  • A dual camera that can automatically detect the scene and subject of the picture and adjust features like brightness or contrast.
  • Wireless charging.

The Note 9 will be available for preorder at 12:01 a.m. ET Friday.

Perhaps Samsung's biggest marketing ploy is to draw users in with its announcement about hit game "Fortnite," which has attracted over 125 million players and over $1 billion in revenue. Epic Games, the developer behind "Fornite," announced Thursday that Samsung Galaxy users will get advanced access to the beta version of the game for Google's Android operating system. In addition to the Note 9, some of Samsung's older flagship phones and tablets will also get access to the game.

CNBC | Magdalena Petrova

Samsung said that those who preorder the Note 9 by Aug. 23 can get special in-game currency for a discounted price. The Android release of the game has been highly anticipated and could draw even bigger numbers to "Fortnite," a trend Samsung will be hoping to capture to help sell the Note 9.

AI, 5G focus

Smartphone shipments fell 1.8 percent in the second quarter from a year earlier, according to research firm IDC. Amid the slowing market, Samsung has begun to invest in new areas of growth. While semiconductors have been a huge profit driver for Samsung, the technology giant is now looking at artificial intelligence and 5G, the next generation of mobile internet.

Samsung said Wednesday it is planning to invest about 25 trillion Korean won ($22 billion) over the next three years into these new growth drivers. Samsung's share price has fallen over 8 percent this year.

What's it like? CNBC's Todd Haselton takes a look.

Samsung to release newest smartphone at New York event
Samsung to release newest smartphone at New York event