Ambitious firms gear up for mobile phone war

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Ambitious firms gear up for mobile phone war

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Tough competition is taking place in the global cell phone market because of low-end and middle-end phones. Nokia and Motorola are continuing to sell inexpensive, mid-priced phones around the world, and recently Apple Computer announced that it will soon enter the cell phone market. A Samsung Electronics spokesman said yesterday that the “war has begun” between mobile firms.
According to industry sources yesterday, Sony Ericsson has begun targeting the Indian market. There the company produces a low-price cell phone with a color screen that can play music, and plans to increase cell phone production to 10 million units by 2007.
Last year, Sony Ericsson was only able to sell 13 percent of that figure. According to Goodmorning Shinhan Securities researcher Kang Hee-wyoung, Sony Ericsson is trying to enter the low-end market and focus on building market share by selling phones for under 100 euros.
As the number four player on the global scene, Sony Ericsson has so far pursued a premium strategy of high-end phones with its music player “Walkman” phone and digital camera “Cyber Shot” phone. The company’s average phone price is $184, while average prices at Samsung Electronics and LG Electronics are $172 and $160, respectively.
Samsung and LG, which target the market for low-price premium phones between $60 and $100 in India, say they do not plan to change their strategies. However, last year the two firms received a large shipment of Qualcomm chips used for low-end phones, which caused industry speculation about whether the firms may begin selling phones for under $50.
Kang Hee-young, a researcher at Goodmorning Shinhan Securities, said the phone market will become tough for domestic phone makers, both in the premium and low-end. “Nokia will probably strengthen its high-end line-up while Samsung expands into the low-end market,” the researcher wrote in an analysis report.


By Suh Kyoung-ho JoongAng Ilbo [wohn@joongang.co.kr]
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