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lion in annual revenue and

ranks No. 5 in unit shipments

of PC printers. Printing engines

account for 10% to 15% of the

cost of goods HP sells, he esti-

mated.

Canon is HP’s main supplier

of printing engines in its exist-

ing product line, a relationship

Mr. Lores said he expected to

continue. Beyond helping HP

enter the market for A3 ma-

chines, he said, the deal would

likely help winnow the number

of suppliers in the market.

“We see HP as a consolida-

tor in the market,” Mr. Lores

said. “We want to drive this

consolidation and make it hap-

pen.”

Besides selling laser printers

for the A3 market, HP expects

to try to diversify its products

with a proprietary technology

that evolved from inkjet print-

ers.

PageWide, which sprays ink

using a print head as wide as

the paper being used, can print

color pages much faster than

traditional inkjets, whose

printer heads move back and

forth across a page, and at a

lower cost than laser printers.

provide more utility to your

user base and enrich that ex-

perience,” he said.

Still, Mr. Erickson said the

new Apple Watch could cut

into sales of fitness-focused

devices from companies such

as Garmin Ltd. and Fitbit Inc.

Amy Nouri, a Garmin

spokeswoman, said the Apple

Watch will introduce more

consumers to the types of

products it makes. “It’s excit-

ing that Apple is coming out

with watches like this,” she

said. “It really legitimizes the

wearable space.”

“We believe there’s plenty

of room in the category given

the significant growth it is ex-

periencing,” a Fitbit spokes-

man said.

A significant part of the Ap-

ple Watch’s sporty push comes

via the Nike deal. A new ver-

sion of the watch, the Apple

Watch Nike+, comes equipped

with the latest Nike+ running

app and Nike-inspired watch

faces and bands.

Despite the prominent Nike

branding on the watch, it isn’t

clear if it will help the world’s

largest sportswear maker gain

share in the competitive fit-

ness-tracker app marketplace.

Nike has focused on devel-

oping software since abandon-

ing production of its own

wearable fitness devices, in-

cluding its short-lived Fuel-

Band, in 2014. The latest edi-

tion of its Nike+ app, released

this summer, combines ele-

ments of fitness tips and moti-

vation with a customized mar-

ketplace, aimed at increasing

direct sales of the company’s

apparel and shoes.

But Apple Watch users will

also be able to download apps

from Nike competitors, includ-

ing Under Armour Inc. and

closely held Strava Inc.

San Francisco-based Strava

offers GPS-enabled fitness

tracking largely for runners and

cyclists and counts its member-

ship in the tens of millions, ac-

cording to a spokesman.

Since 2013, Under Armour

has spent more than $700 mil-

lion to acquire a suite of fit-

ness apps and counted more

than 175 million registered us-

ers as of July. The newest Ap-

ple watches, including the

Nike-branded edition, will be

compatible with Under Ar-

mour’s UA Record and Map-

MyRun apps, according to a

spokeswoman.

In a statement, Nike said

the co-branded version of the

watch will feature its logo and

that some functions, including

directing Apple’s Siri voice

command to begin workouts,

will sync only with Nike’s run-

ning app.

“Apple and Nike both share

a passion to make life easier

and more fun for our consum-

ers,” the company said.

ing engines used in its own la-

ser printers, while HP has al-

ways used external suppliers

for these components.

Enrique Lores, president in

charge of HP’s imaging and

printing business, said acquir-

ing printer engine technology

would both bolster its profit

margins and help it shape the

evolution of its laser printers.

“You have control over the

core technology,” he said.

“That is very, very important.”

The deal includes about

6,500 of Samsung’s printing-re-

lated patents, which Mr. Lores

said would also help HP expand

its business. Around 6,

Samsung employees will join

HP, including about 1,500 engi-

neers, he said.

Samsung has been slimming

down its business portfolio un-

der the leadership of the con-

glomerate’s vice chairman and

heir apparent, Lee Jae-yong,

and increasing its focus on its

market among other technol-

ogy companies, said Lee Sei-

cheol, an analyst at NH Invest-

ment & Securities, adding that

the deal can be seen as a bid to

strengthen the South Korean

company’s better-performing

areas.

The world’s top maker of

smartphones, memory chips

and refrigerators, it ranks fifth

in the global hard-copy periph-

erals market by shipments with

a 4% market share, behind

global majors HP, Canon, Seiko

Epson Corp. and Brother Indus-

tries Ltd. Samsung’s shipments

declined by 8.9% in the second

quarter compared with a year

earlier, according to research

firm IDC.

Samsung doesn’t break out

separate sales figures for its

printer business, which falls

under the consumer electronics

division that sells televisions

and home appliances such as

refrigerators and washing ma-

chines. Last year, consumer

electronics contributed to just

4.7% of the company’s operat-

ing profit, while the higher-

profile smartphone and chip

divisions generated 38.4% and

48.4%, respectively.

Amit Daryanani, an analyst

at RBC Capital Markets, esti-

mated in a research note that

Samsung’s printer business

generates $1 billion to $1.6 bil-

HP Inc. agreed to buy Sam-
sung Electronics Co.’s printer
business for $1.05 billion, a
deal designed to help the Sili-
con Valley company expand
into high-volume devices that
handle printing and copying
for office work groups.
The transaction, which is
subject to regulatory approval,
is expected to close within 12
months, the companies said on
Monday. Samsung also agreed
to make an equity investment
of $100 million to $300 million
in HP through open-market
stock purchases after the sale
is completed.
HP, created as part of the
breakup of Hewlett-Packard Co.
last fall, sells personal comput-
ers but gets most of its profit
from supplying ink and toner
for the printers it sells. It is the
market leader in the desktop-
class printer segment.
That business hasn’t been
growing lately, in part because
PC users print fewer pages
these days. HP last month re-
ported that revenue from ink
and toner supplies declined
18% in the third fiscal quarter
from the year-earlier period,
while printer hardware unit
sales were down 10%.
Dion Weisler, HP’s chief ex-
ecutive, has vowed to spur rev-
enue growth by moving into
larger printer-copier combina-
tions known by the designation
A3, the stronghold of such
companies as Xerox Corp.,
Canon Inc., Ricoh Co. and Kon-
ica Minolta Inc. Samsung al-
ready has a business selling A
machines, which HP will ac-
quire in the deal.
HP also will acquire the abil-
ity to manufacture the crucial
mechanisms inside laser print-
ers, known as printing engines.
Samsung developed the print-

BYDONCLARK AND
EUN-YOUNGJEONG

HP Bolsters Printing Assets

Company agrees to

pay Samsung $1.

billion for business as

it looks to take on

Xerox, Canon

HP printers on a retail shelf. A Samsung deal would help HP move into high-volume office devices.

DAVID PAUL MORRIS/BLOOMBERG NEWS

When Apple Inc. Chief Ex-
ecutive Tim Cook introduced
the Apple Watch two years
ago, he touted its many fea-
tures, including email, a calen-
dar, the weather and phone
calls.
Mr. Cook also described the
watch’s health features. But
when Apple unveiled an up-
dated model last week, how-
ever, the focus was clearly on
sports and fitness. “We think
Apple Watch is the ultimate
device for a healthy life,” said
Jeff Williams, Apple’s chief op-
erating officer.
The evolving presentations
underscore a shift in Apple’s
marketing focus for the watch,
from a stylish jack-of-all-
trades fashion accessory to a
personal trainer.
Apple designed the new
version, called Series 2, to be
water resistant to a depth of
50 meters, thanks to a custom-
designed speaker system that
flushes out water after a
swim. Apple also touted a
partnership with Nike Inc. to
market sports-themed watches
along with GPS capability that
helps the device track hikes,
runs and bicycle rides.
Analysts estimate that Ap-
ple sold about 12 million
watches in the year following
its April 2015 launch, but the
product hasn’t proved to be a
breakout hit like the iPhone;
Apple has sold more than one
billion iPhones over the past
nine years. One rumored fea-
ture Apple didn’t add to the
watch: a cellular connection,
so the watch can handle calls
independent of an iPhone.
“They’re still missing out
on a central purpose, but
they’re inching toward a de-
vice that does fitness and
health quite well,” said J.P.
Gownder, an analyst with For-
rester Research Inc.
Apple still considers the
Watch a multipurpose digital
accessory. Pacific Crest Securi-
ties analyst Brad Erickson
agrees. “If you’re Apple, your
broader purpose is to use your
devices and your ecosystem to

BYROBERTMCMILLAN
ANDSARAGERMANO

Apple Watch Shifts Focus

Toward Sports and Fitness

Apple operating chief Jeff Williams introduced the Series 2

watch, designed to be water resistant to a depth of 50 meters.

XINHUA/ZUMA PRESS

Samsung advised users of the

Galaxy Note 7 smartphone to

turn off the device and not use

it. Several airlines have asked

passengers not to use the

phone while flying or stow

them in checked luggage.

The statement disclosing Mr.

Lee’s nomination also came on

the day Samsung said it agreed

to sell its printing business unit

to HP Inc., a deal viewed by ana-

lysts as driven by the third-gen-

eration heir’s desire to slim

down the company’s business

portfolio and strengthen its bet-

ter-performing areas.

His nomination will be put

to a shareholder vote on Oct.

27, the company said. The ad-

dition of Mr. Lee to the com-

pany’s board will allow him to

increase his involvement in

business decisions such as in-

vestments and merger-and-ac-

quisition deals, a person famil-

iar with the matter said.

Mr. Lee, 48 years old, became

vice chairman of Samsung Elec-

tronics in 2012 after stints as

chief customer officer and chief

operating officer. He is known

for keeping a low profile in def-

erence to his father. Lately, how-

ever, he has stepped up public

appearances, serving as the face

of Samsung in meetings with

Facebook Inc. Chief Executive

Mark Zuckerberg, Google parent

Alphabet Inc. CEO Larry Page

and Chinese leader Xi Jinping.

SEOUL— Samsung Electron-

ics Co. nominated Lee Jae-yong,

the son of its longtime chair-

man, to its board of directors as

shares in the technology titan

suffered their steepest one-day

decline since 2008 in the wake

of a global phone recall.

The latest step in the eleva-

tion of Mr. Lee, the South Ko-

rean company’s vice chairman

and heir apparent, comes more

than two years after his father,

Chairman Lee Kun-hee, was hos-

pitalized following a heart at-

tack. He remains incapacitated.

Samsung on Monday said

the announcement wasn’t re-

lated to the crisis that has en-

gulfed the company since it

initiated a voluntary recall of

its latest smartphone, the Gal-

axy Note 7, earlier this month

because of a risk that the bat-

tery might catch fire.

Investors dumped Samsung

shares again Monday, knock-

ing a further $15.9 billion off

the company’s market value

after wiping out more than

$10 billion Friday.

Samsung shares Monday

finished down 7% at 1.465 mil-

lion won ($1,321) in Seoul, the

largest fall since October

2008. Analysts said Samsung’s
      steep decline was compounded
      by global market concern over
      a possible U.S. interest-rate in-
      crease this year as well as de-
      clines in U.S. stocks last week.
      South Korea’s main Kospi
      share index dropped 2.3%, its
      biggest one-day fall since Jan-
      uary. “It’s one thing piling on
      after another,” said Lee Sei-
      cheol, an analyst at NK Invest-
      ment & Securities.
      Since the company an-
      nounced the voluntary recall
      of more than 2.5 million
      smartphones on Sept. 2, it has
      been under pressure to act
      more decisively in response to
      increasing reports of phones
      catching fire because of faulty
      lithium-ion batteries. On Fri-
      day, the U.S. Consumer Prod-
      uct Safety Commission and

BYEUN-YOUNGJEONG

New Samsung Role

For Heir Apparent

Samsung’s Lee Jae-yong

SEONGJOON CHO/BLOOMBERG NEWS

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