Samsung Electronics unveiled on Wednesday four new smartphone models under its flagship Galaxy line to expand it to the mid to low-end segment and grow in emerging markets, as bigger rival Apple prepares a cheaper version of the iPhone 4.

The move signals intensifying competition with Apple Samsung's biggest competitor and customer, as the U.S. firm is set to launch a lower-cost version of the iPhone 4 and its much-anticipated iPhone 5 soon.

Apple and Samsung emerged as the world's No.1 and No.2 smartphone makers respectively in the second quarter, ending the 10-year reign of Nokia.

Apple has long stuck to the higher end of a booming mobile device arena, but is now seeking out new markets to sustain the rip-roaring pace of growth that has enthralled Wall Street.

Samsung seeks to expand market share in the emerging market with models costing around $200, as those markets have lower smartphone penetration rates compared with advanced markets, a Samsung group spokeswoman quoted an executive from Samsung Electronics' mobile division as telling a meeting of the group's executives on Wednesday.

Samsung sees cheap models costing below $200 accounting for more than half the overall smartphone market by 2015 in volume terms, up sharply from last year's 16 percent.

Its new mid-to-high end Galaxy W will have a 3.7-inch screen, while the mid-tier Galaxy M Pro and lower-end Galaxy Y Pro will be Samsung's first Galaxy models with qwerty keyboards.

The fourth Galaxy Y model is an entry-level product aimed at emerging market consumers.

Samsung launched its top-end Galaxy S smartphone in June 2010 and its follow-up Galaxy S II, launched in April this year, has sold more than 5 million units.

The new Galaxy lineup will be unveiled to the public at an annual electronics fair in Germany in early September.

The global smartphone market is expected to account for around 64 percent of the total handset market this year in dollar terms, up from 54 percent a year ago, according to industry data.

Shares in Samsung fell 2.8 percent by 0219 GMT, lagging a 1.6 percent drop in the wider market.

(Reporting by Miyoung Kim; Editing by Jonathan Hopfner)

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