Samsung Electronics Corp. yesterday denied charges that it is strategically slashing prices of its MP3 players in overseas markets in pursuit of global market share.

A Yonhap news report said Samsung cut prices of its Yepp portable music players as much as by half in Japan, citing the case of YP-C1, a model which sells exclusively online.

The report said that YP-C1 carried a price tag of about 84,250 won in Japan for 512 MB and 121,200 won for 1GB, compared to their local prices set at 199,000 won and 259,000 won, respectively.

An unnamed industry insider, quoted by Yonhap, suggested that Samsung may be using low-cost approach targeted against mid-tier companies. The insider excluded Apple Computer Inc., the global leader in MP3 player market.

"Apple is a major client of Samsung`s memory products," the insider said. "Samsung appears to be targeting mid-tier companies."

He also asserted Samsung was helping Apple by offering semiconductors at discount.

Samsung strongly denied the report, arguing prices can겝t be same in every market due to difference in tax and logistics structures, as well as after-service and average consumer prices.

An official, who declined to be identified, said the lower prices in Japan were a one-time only event, timed with the "golden week," one of the Asian country`s three busiest holiday seasons. "It is customary for electronics companies to offer huge discounts during the holiday season."

The official said Samsung will raise the prices to 104,160 won and 161,080 won, respectively, once the special sales season is over. He explained the still remaining 30 to 40 percent gap in price was due to a difference in options.

"The music players sold in Japan and here are not exactly the same," the official said. "Players sold in Japan are up to 7,000 yen (about 70,000 won) cheaper because of difference in features, including the FM tuner and sound quality control," he said.

Currently, the global music player market is dominated by Apple which has a 60 percent share with iPod, with Creative Technology Ltd., also a U.S. company, trailing behind with between 22 and 25 percent share.

Korean vendors, including ReignCom, accounted for 20 percent of the market share last year, a drop from 33 percent in 2003 due to the huge popularity of high-capacity hard disk drive players put out by the two leading U.S. companies.

Samsung Electronics, which sold just 1.7 million MP3 players last year and is ranked about eighth in world order, declared recently that it would carry out massive marketing activities to become the top MP3 player vendor in 2007.

Samsung designs and manufactures its MP3 players through its affiliate Samsung Bluetek. The company is targeting 5 million in global sales for this year.

Samsung has been accused of low-coast approaches for the U.S. and European market earlier, inviting criticism the strategy is unfair to Korean consumers. Industry insiders have also expressed concerns that cheaper products could be imported back into Korea, throwing the structure of local pricing into confusion.

While mp3 players account for just 1 percent of Samsung sales, the company appears to be increasingly using it to increase brand awareness in the world.

Samsung has been advertising its Yepp player (YP-T7) on CNN since April 1. Samsung has also replaced its initial Anycall advertisements with ones featuring Yepp in major IT districts in Beijing.

Along with mobile phones and personal computers, Samsung also considers MP3 players one of the most popular added-value products in the current global electronics market, an official of Samsung Bluetek recently said.

(mhkim@heraldm.com)



By Kim Min-hee