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Pastimes : The New Qualcomm - write what you like thread. -- Ignore unavailable to you. Want to Upgrade?

To: qdog who wrote (744)	10/28/1999 11:03:00 AM
From: Ruffian	Read Replies (1) \| Respond to of 12254

SK Telecom To Battle Handset Makers By John Park SEOUL, South Korea--SK Telecom, South Korea's largest wireless carrier, is ready to enter the phone manufacturing business. Existing handset makers are concerned that another entry will merely increase competition in the already crowded market. SK Telecom, an affiliate of South Korea's fifth-largest conglomerate, SK Group, established a joint venture in September with Kyocera Corp. of Japan to produce cellular phones. The new joint venture firm, called SK Teletech, is expected to manufacture and market code division multiple access-based handsets. SK owns 72.5 percent of the new firm and the remaining 27.5 percent is owned by Kyocera. SK seems to have finished all preparations for manufacturing the handsets. "We are ready to roll out," said Kil Jong Ku, a general manager of SK Teletech. Recently, the company signed an agreement with DSP Communications Inc. to introduce processor chip sets for dual-mode handsets. This is the first time a South Korean firm will use DSP chips to make handsets. Most South Korean handset makers, including Samsung, use Qualcomm Inc. chips, paying higher royalties of 5.75 percent of total sales plus $2.50 per handset. "We are confident that DSP chips will enable us to have competitiveness in the market," Kil said. DSP is one of the leading producers of chip sets; the company holds a 25 percent market share in Japan. DSP has developed strong relationships with major handset makers, including Fujitsu, Philips and Kyocera. SK said it will start selling its newly developed handsets in December. The company expects to produce 50,000 to 100,000 handsets a month at its plant in Wonju City, about 90 miles east of Seoul. SK is likely to launch an extensive newspaper and television advertising campaign. The company said it will introduce three new phone models by June 1999. The South Korean wireless industry has grown rapidly. The number of subscribers in South Korea reached 12 million as of Sept. 27, representing a four-fold increase from the 3 million at the end of 1996. The rapid growth was fueled by heated competition among the five carriers. During the first six months of this year, 4.3 million units were sold; almost 5.2 million were sold last year. Currently, more than 10 handset makers compete in the market, which is dominated by two firms, Samsung Electronics Co. Ltd. and LG Information and Communications Co. Ltd. Among South Korean handset manufacturers, Samsung is the most sensitive about SK's entry. Samsung controls 54 percent of the handset market. "Now we have to fight against SK," said Yoon Jong Jin, a manager at Samsung. The company predicts that SK will take advantage of its position as the largest carrier and will supply its products to subscribers.