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Samsung delays launch of Android-based phone

Samsung has delayed the release of its first mobile phone based on Google's Android operating system until the second half of this year.

There had been speculation that Samsung, which recently leapfrogged Nokia to become market leader in the UK, would unveil its first phone running Android at next week's Mobile World Congress trade show in Barcelona.

But Younghee Lee, head of marketing at Samsung's mobile device division, said there will be no Android phone at the show, but they are "planning internally" for a release in the second half of the year. She said the company is in negotiations with a number of operators about taking a Samsung-designed Android phone.

The news came as Samsung unveiled what it says will be one of its flagship handsets for the coming year - a slimmer version of its highly successful Tocco touchscreen device. In the latter half of last year, the original Tocco became the most popular phone for people signing up to a monthly contract in the UK. Samsung is hoping for similar success from the new version of the phone, which is expected to go on sale next month.

Samsung is making touchscreen phones one of its areas of focus for 2009 as the industry faces its first downturn since the dotcom crash, and several executives say the mobile phone market is polarising.

The market for entry-level phones is still booming in emerging markets but in more mature markets the middle ground has all but disappeared - consumers are either keeping their existing handsets and trading down to cheaper sim-only deals, or demanding the latest in must-have top of the range gadgetry, including touchscreens. To meet this demand, Vodafone recently launched the BlackBerry Storm, while T-Mobile had hoped to score a hit with the first Android phone, the G1, developed by Taiwan's HTC.

Since it hit the shops last autumn, however, sales of the G1 appear to have been disappointing. In the UK, T-Mobile lost 16,000 customers in the run-up to Christmas. In contrast, Vodafone added 449,000 in the same period.

There is talk that HTC will announce the next version of its Android phone, the G2, at Mobile World Congress. Leaked online photos, purporting to depict the device, appear to show that HTC has dumped the slide-out keypad for the new model. T-Mobile is not expected to stock the new version of the phone in the UK, though it may carry it in the US.

Last week, Matthew Key - boss of Telefonica Europe, which owns O2 - said customers are less willing to commit to 18-month contracts because of the downturn. "The middle ground in the market is starting to disappear, (but) clearly in destination purchase end you have things like the iPhone, like the Storm, like the G1 device," he said.

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