SAMSUNG TO INTRODUCE A WATCH-LIKE PHONE THIS MONTH.

Samsung Electronics Co. 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.

Asia's biggest technology company is racing other electronics makers, including Sony Corp., 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 smart phones, tablets and TVs.

"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."

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 smart phone and tablet computer.

Apple had a team of about 100 designers working on watch-like device, two people familiar with the matter said in February. The Cupertino, California-based company is seeking to introduce its device this year; one of the people familiar said at the time Samsung became the world's largest smartphone maker last year, overtaking Apple.

The Suwon, South Korea-based Company had about 33 percent of the global smartphone market in the second quarter, while the iPhone maker fell to a three-year low as more consumers chose inexpensive handsets from Chinese makers, according to researcher Strategy Analytics. Samsung posted second-quarter earnings July 26 that missed analyst estimates as sales growth for the flagship Galaxy S4 was curbed by slowing demand for high-end handsets.