Pantech refocuses on N. America, EU
koreaherald.co.kr
HANOVER, Germany - Overshadowed by better-known rivals Samsung Electronics Co. and LG Electronics Inc., Pantech Co., Korea's third-largest mobile-phone manufacturer, has relied on less-developed mobile markets such as Eastern Europe and South America to build its reputation. Now after becoming the world's seventh-largest handset maker, the company thinks it is ready to take on the competition head-on.
Chief Executive Lee Sung-kyu says Pantech is attempting to transform itself from a company focused on smaller niche segments into a global trendsetter whose products are tailored for consumers in the highly competitive markets of North America, Europe and Japan.
"We are eying about 50 countries in the Americas, Asia, Europe and Middle East as our main target markets. We expect to be among the world's top five mobile-phone makers by the end of the year," said Lee while meeting reporters before leaving for the six-day CeBIT technology trade fair that begins today in Hanover, Germany.
Lee said Pantech and its sister company, Curitel Communications, is targeting shipments of 28 million units and $3 billion in overseas sales. The companies sold around 19 million handsets overseas last year. Pantech & Curitel sell their products under the Pantech name in overseas markets.
Pantech's renewed focus is to take advantage of the current market environment where third-generation mobile telephony is starting to spread in North America and Europe after a slow start a few years ago. This gives the company the ability to market its lineup of high-end products that feature wireless Internet, built-in digital cameras and mobile television functions. Pantech is expected to release 85 new models overseas this year, with most of them targeted to North America and Europe.
Industry watchers believe the world's number of third-generation subscribers could hit 70 million by the end of the year, from the current 20 million subscribers in 31 countries, with operators expanding their coverage.
Last month, Pantech announced a deal to supply third-generation CDMA2000 1x EV-DO handsets to Verizon Wireless, the second-largest mobile operator in the United States with more than 34 million subscribers. Pantech hopes to sell around 10 million phones to North American wireless operators this year.
The company plans to establish six branch operations in the United States and Canada within this year to strengthen marketing.
The first will be Pantech & Cypress, based in Cypress, California, which is expected to start business later this month. The other branches will be in New Jersey, Atlanta, Kansas City, Seattle and Toronto. Pantech's sales in North America reached 3.7 million units last year, up from 1.9 million units in 2002. The company is also considering establishing branches in Brazil and Mexico.
Europe is another major market for Pantech. The company, which currently runs a branch office in the Netherlands, is negotiating with mobile operators in Britain, France, Germany, Spain and Italy to market their third-generation WCDMA handsets. Pantech is also planning to strengthen the operations of its Russian branch office and expand business to CIS countries such as Ukraine and Uzbekistan.
"The North America and Europe market will be critical in establishing our brand name among larger rivals such as Motorola, Samsung and LG," said Park Byeong-yup, vice chairman of the Pantech Group, overseeing operations of both Pantech and Curitel Communications.
"Our overseas business relied significantly on original design manufacturer contracts in the past few years, making products that sell under the name of better-known companies. Last year, about 40 percent of our products were sold under our name. We want to double that this year," he said.
Pantech will unveil three new third-generation WCDMA phones at the CeBIT tech fair, tailored for European customers, including a phone that single-handedly supports a built-in stereo music player, Bluetooth capability, video-on-demand functionality and a high-resolution digital camera. The company will also feature a handset that supports mobile television functionality, featuring a 2.4-inch liquid-crytal display and 3D stereo sound, and a mobile Internet phone integrated with a Windows operating system.
Pantech's PH-L4000V model, a phone that also works as a digital camcorder, and the PH-S4000, a small and light (82 grams) handset with digital music playing functionality, on Thursday took International Forum Design Awards, the world's top honor in industrial design.
Pantech will feature 29 new phones at CeBIT to bolster its portfolio for European markets.
Pantech was established in 1991 as a manufacturer of pagers. With the Korean pager market declining in the late 1990s as mobile-phone services became cheaper, the company folded its pager business and restarted as a mobile-phone maker. The transition was accelerated when the company acquired rival Hyundai Curitel, then an electronics affiliate of the Hyundai Group, which helped expand its domestic customer pool.
According to market research group Gartner, Korea's three largest handset manufacturers - Samsung Electronics, LG Electronics and Pantech - sold an estimated 1.52 billion mobile phones last year, accounting for 24.2 percent of the global market at 6.4 billion units. The three companies control nearly 90 percent of the domestic handset market, with Samsung Electronics controlling 47 percent and LG Electronics and Pantech taking about 21 percent each.
(thkim@heraldm.com)
By Kim Tong-hyung
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