Local CDMA Industry Upbeat on China
By Kim Deok-hyun Staff Reporter
Code division multiple access equipment bound for export to China is expected to sharply rise in volume due to a bigger-than-anticipated investment plan proposed by China Unicom, China’s second biggest telecom company.
According to a report released by the Ministry of Information and Communication (MIC), China Unicom plans to build the second-stage of its CDMA network for $2.6 billion by the first-half of next year, following deployment of the first-stage costing $1.8 billion.
The report is good news for Korea’s wireless hardware manufacturers, which have struggled in the nation’s highly competitive mobile phone market, analysts said.
As of the end of August, China Unicom had some 1.7 million CDMA customers. Earlier this year, the company set its target for 2002 to four million subscribers.
China Unicom is expecting to build the world's largest CDMA mobile phone network by the end of 2004 with 50 million subscribers. It currently operates CDMA networks in Beijing, Shanghai, Tianjin, Xi'an and Guangzhou.
Samsung Electronics, which took a lion’s share in China’s mobile handset market, signed a $400 million contract to export its CDMA2000 1X phones. Samsung Electronics officials could not be reached for comment.
Dubbed a 2.5-generation network, the 1X phone system offers double the voice capacity of CDMA with enhanced data transmission speeds.
Last year, Samsung Electronics won the right to sell CDMA equipment in Shanghai, Tianjin, Fujian and Hebei from China Unicom. It already set up marketing outlets for its 1X handsets in the mainland.
LG Electronics, which failed to win for China Unicom’s CDMA equipment bid last year, has said that the company would make a more determined effort this time around. It signed an agreement to cooperate with local CDMA research centers and has applied for permission to set up of a joint Chinese subsidiary.
Sewon Telecom, a mid-sized handset manufacture, was also awarded a contract to provide Ningbo Bird with $4 million GSM (global system for mobile communications) handsets by the end of this year. It is also in the process of contacting several Chinese companies to secure CDMA deals.
In the meantime, Korea's trade surplus to China in information-technology products is estimated to have increased by nearly $400 million last year due to China's entry into the World Trade Organization (WTO), according to a report by the Electronics and Telecommunications Research Institute (ETRI).
The report said Korea's exports of IT products to China increased by $587 million last year on average with China's entry into the WTO, while IT product imports from China should grow $191 million a year on average for a trade surplus increase of $396 million.
kdh@koreatimes.co.kr
2002/09/23 19:25
hankooki.com
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Handsets to Replace Cars as 2nd Largest (Korean) Export Item
By Kim Sung-jin
Staff Reporter
The luxury strategy of Korean mobile handset makers has hit the target, making mobile
handsets one of the nation’s leading export items.
Mobile phone models manufactured by the nation’s leading electronics firms, namely
Samsung and LG, have already solidified their brand image as symbols of wealth in China
and Hong Kong, and are regarded as luxury brands in Europe and America where
consumer tastes are known to be rather fastidious.
Korea’s exports of wireless telecom equipment, which includes mobile handsets, wireless
telecom systems and related peripherals, have been brisk over the past years and
exceeded the $10 billion mark for the first time last year, and have already amounted to
$7.74 billion during the first eight months of this year, up 24.1 percent year-on-year.
The Information and Communication Ministry forecast that considering the rapid growth
of mobile handset exports, especially to China, Korea’s wireless telecom equipment
exports would come close to $15 billion this year.
If so, wireless telecom equipment exports would soon override automobiles and emerge
as the nation’s second largest single export item following semiconductors.
The success of Korean mobile handsets overseas is the fruition of harmonized growth
strategies in marketing, technology and design.
The plan of Korean mobile handset manufacturers to directly compete with global players
and explore the luxury niche market has proven exceptionally effective.
Fast forward to the late 1990s, when Korea first dipped its foot in the global mobile
handset market, domestic firms have had to struggle in an uphill battle with predominant
global players like Nokia, Motorola and Ericsson, and Korean companies have chosen the
high-price, luxury strategy centered on enhancing profitability.
Rather than pursuing global market share, domestic mobile handset makers have rolled
out luxury models, and this has reaped greater-than-expected results.
According to global market research firm Gartner Dataquest, Samsung and LG each
grasped 9.5 percent and 3.1 percent of the global mobile handset market share in the
second quarter of this year, ranking third and sixth place, respectively.
Albeit the global market share of Korean makers lags behind that of the world’s leading
player Nokia (35.6 percent) and Motorola (15.7 percent), the profitability ratio of
domestic firms tops 30 percent of annual sales, much higher than its foreign
counterparts that are seeing below 20 percent.
Indeed, just viewing the high-price product segment of the world mobile phone market,
Samsung Electronics retains roughly 30 percent of the global market, the de facto world
leader, according to the company.
Behind the success of Korean mobile handset makers in the high-value added product
market is its technological and design edge that has enabled domestic firms to market
more advanced models than their foreign counterparts and maintain richer luxury product
portfolios.
Nokia and Motorola have rolled out some 20 new models a year, but Korean companies
have been introducing five to six new models a month on average. The time required to
market a new model by domestic firms only take six to eight months, whereas foreign
countries take more than a year.
Cumulated technological know-how has enabled Korean electronic firms to roll out the
world’s first third-generation handsets such as models with 260,000 color liquid crystal
displays, built in digital camera and video mobile phones.
``Our accumulated technological knowledge in producing light and compact home
appliances plays a large part in leading our mobile handset business to success,’’ said Kim
Jong-eun, CEO of the telecom equipment and mobile handset business operation of LG
Electronics.
Consistent development of new mobile handset designs is also reckoned to be a huge
contributing factor to the domestic mobile phones’ success abroad. Samsung Electronics’
dual folder models are popular among young Chinese consumers, and a model that looks
like foundation powder case was a major hit among women in France.
A Samsung Electronics official attributed the success abroad to the finicky taste of
Korean consumers, which have enhanced their design ability to world class levels.
``We are having a hard time meeting the inordinate demands for manufacturing mobile
handsets from mobile carriers and consumers, but this has contributed greatly to
improving our product quality and competitiveness,’’ said the official.
sjkim@koreatimes.co.kr
2002/09/23 19:22
hankooki.com |
