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Foreign phone makers struggle in Korea

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Published : 2012-07-11 20:09
Updated : 2012-07-11 20:09

Analysts attribute declining foreign presence to lack of marketing, distribution  and AS service capability


Foreign mobile phone makers are facing difficulties in marketing their brands in Korea, one of the most wired countries in the world, and competing against local giant players such as Samsung Electronics.

Industry sources said that this is nothing new as the local market has always been dominated by local companies, with little space open to foreign players to increase their presence, even during the feature phone boom.

Nokia may have grabbed a large market share in feature phones globally, but things were not the same in Korea, and it remains that way following the introduction of smartphones, they said.
One source said that Samsung Electronics, LG Electronics and the reviving Pantech will continue to take most of the market share in the country, whereas foreign makers struggle to make themselves noticeable to Korean consumers who are generally known to be not only tech-savvy but also picky.

Most foreign makers’ mobile phone market share is less than 1 percent.

HTC accounted for a 0.7 percent share, followed by Motorola’s 0.4 percent and Sony’s 0.3 percent in the first quarter of this year, according to Gartner, a tech research firm.

The tide has even turned for Apple, which ignited the smartphone craze with the iPhone. Its market share in Korea plummeted to 2 percent from about 23 percent two years ago.

Altogether, the foreign share amounts to a mere 3.4 percent. Meanwhile, mobile phones of Samsung Electronics, LG Electronics and Pantech saw their shares increase to more than 90 percent over the last two years.

A source said that the declining foreign presence is in part attributable to the lack of marketing, distribution and after-sales service capability equivalent to local giants.

“There have not been eye-catching phones, or even advertisements, maybe with the exception of iPhone4S, released by foreign makers in the market for quite some time,” the source noted.

Motorola and Sony have not introduced any new lines of smartphones in Korea since the third quarter of last year, according to media reports.

Also, no plans have been announced by Korea’s three telecommunications companies ― SK Telecom, KT and LG Uplus ― to market foreign mobile phones, excluding Apple’s new smartphone whose release date has been delayed.

Analysts said that Korean brands are likely to dominate in Long Term Evolution phones as they were some of the earliest LTE adapters.

Samsung Electronics said that more than 50,000 consumers bought its new flagship Galaxy S3 LTE smartphones on the first day of their release on Monday.

It had sold 10,000 Galaxy S and 24,000 Galaxy S2 smartphones on their respective first days.

By Park Hyong-ki (hkp@heraldcorp.com)

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