Pantech & Curitel said Wednesday that it recorded W446.2 billion (about US$446.2 million) in sales and W11.8 billion in operating profits in the second quarter of the year. Sales dwindled 14.2 percent and operating profits 28.4 percent from the previous quarter. The company sold only 2.3 million cell phones, down 13.7 percent on-quarter.

LG Electronics' cell phone sector recorded W1.82 trillion in sales in the second quarter, down 2.8 percent on-quarter and 5.2 percent on-year, posting a W4 billion operating deficit for the first time. Samsung Electronics recorded W4.19 trillion in sales, down 8 percent on-quarter and 9 percent on-year, despite an increase in the number of sold units.

In a clear contrast to the poor performance of Korean cell phone manufacturers, Nokia's net profits grew 18 percent and sales 24.7 percent compared to the same period last year. Its share in the global market also increased from 32 percent to 33 percent. The world's second largest cell phone maker Motorola posted US$4.9 billion in sales, up 24 percent from a year earlier. The company sold 62.6 million units, 13.6 million units more than Samsung.

Analysts say that the poor performance of Korean cell phone producers is attributable to their failure to capture low-price markets. The Financial Times said Tuesday that Korean cell phone makers posted poor business results since they failed to produce appropriate models targeting newly emerging low-price markets.

Demand for premium phones will increase by 2009 when new markets grow fully, but before then, low-priced models will be popular in new markets and foreign makers like Nokia and Motorola will benefit from the demand growth in those markets, the newspaper said.

Cho Jung-gon of LG Electronics says that as the U.S and European markets mature, new low-price markets are emerging strong. However, he expects new models like 3.5 generation phones to make a breakthrough.

(englishnews@chosun.com )