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Sales of Korean cell phones are skyrocketing amid the worsening economic crisis. While Finland's Nokia, the world's leading cell-phone brand, shows little rise in sales, the world's second and third players, Samsung and LG, are rapidly catching up while receiving a flood of orders from the U.S. and Europe.
Sony Ericsson and Motorola are also showing a sluggish performance in the recent two years, according to market researcher Strategy Analytics. The market share of Motorola fell dramatically to 8.5 percent in the fourth quarter of 2008 from 22.4 percent in the fourth quarter of 2006. Sony Ericsson also saw its market share drop from 8.9 percent to 8.2 percent during the same period. On the other hand, the market shares of the Korean companies jumped from 11.2 percent to 18.0 percent for Samsung, and from 5.8 percent to 8.7 percent for LG.
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A model looks at her cell phone in front of the Eiffel Tower in Paris. /Courtesy of Samsung Electronics.
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The combined sales of the two Korean handset manufacturers now account for 70 percent Nokia's sales. Their robust performance is becoming increasingly noticeable as the global economy plunges into depression. In West Europe, the world's premium cell phone market along with North America, the Finnish brand's market share decreased by 3.9 points to 34.8 percent in January from 38.7 percent a year ago. However, Samsung saw its market share increase 5.3 points to 24.6 percent and LG 2.5 points to 8.6 percent. In the U.K. and France, in particular, Samsung has ranked first, replacing Nokia.
The biggest reason behind the Korean handset manufacturers' stellar performance lies in the favorable exchange rate. An industry source said, "The weak won has given Samsung and LG price competitiveness." The slump of global rivals such as Motorola and Sony Ericsson also helped.
Some industry watchers also believe that the Korean companies' capability to develop various new models has led to the rise in sales. Woo Jong-sam, a managing director at Samsung Electronics, said that Samsung may be the only handset maker in the world that launches an annual average of 100 new models. Nokia releases an average of 40-50 new models per year. Others say that Korean cell phone makers are doing well because they are keen to release products that fit the local market.
(englishnews@chosun.com )
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