Samsung Electronics unveiled a new top-of-the-range Galaxy smartphone on Thursday, updating the most direct rival to Apple's iPhone with a larger touch screen and more powerful processor.
The South Korean technology group, which overtook Finnish company Nokia as the world's biggest cellphone maker earlier this year, said the SIII model would go on sale in some markets in late May and around the world from June.
Last week, Samsung reported a record US$5.2 billion quarterly profit, boosted by Galaxy SII smartphones whose sales outstripped the iPhone.
Samsung's handset division moved more than 20,000 Galaxy phones an hour in the first quarter and contributed most of its operating profit.
The new SIII will have a 4.8 inch touch screen, 8 megapixel camera and will use the latest version of Google's Android software.
Won-Pyo Hong, head of product strategy at Samsung's mobile business, said it expected sales of the SIII to outstrip predecessor SII's more than 20 million units.
"Definitely, we expect so. The level of interest from our partners has been bigger," Hong told Reuters in an interview. He said the marketing budget would also increase, even if brand awareness was already quite high.
"We need to spend more on marketing to address consumer interest and to meet requirements of our partners," he said.
Analysts said the new device represented a formidable challenge to rivals, given a combination of the Galaxy brand, sales support from operators and heavy marketing.
"Samsung must make the most of a 4-5 month window of opportunity with the Galaxy SIII before Apple changes the game once more with its next generation iPhone," said Geoff Blaber, analyst at CCS Insight.
"Supported by an eye-watering marketing spend aligned to Samsung's Olympics sponsorship, this is going to be the biggest non-Apple smartphone launch ever seen."
The new Galaxy will be powered by Samsung's quad-core microprocessor, which the company hopes will also be used in handsets made by Nokia, HTC and Motorola, as well as Apple, its biggest customer for components.
The Exynos 4 Quad, based on British chip designer ARM Holdings Cortex A9 technology, enables more tasks in a shorter period of time - for example streaming video can run on one core while the other cores update applications, connect to the web and scan virus-check, simultaneously.
Samsung shares hit a lifetime high after its first-quarter results, pushing its market value to US$190 billion, 11 times that of Japanese rival Sony, though still only a third of Apple's, the world's most valuable company.
Apple and Samsung's near duopoly in high-end smartphones was not expected to come under threat this year or next.
Nokia, whose shares are at a 15-year low is betting on a tie-up with Microsoft to revive its fortunes in the lucrative smartphone market. It said last month it would make a first-half loss as it struggles to revamp its product line.
Technology research firm Ovum said in a note on Thursday it expected Microsoft to establish its Windows Phone as a relevant smartphone platform by 2017.
At its annual meeting on Thursday, Nokia's chairman-designate defended the group's turnaround strategy to investors losing patience with its efforts to catch up.
(Reporting By Tarmo Virki; Editing by Dan Lalor)