NEW YORK-For Samsung Telecommunications America, South Korea’s mandatory elimination of wireless handset subsidies created a ripple effect across the ocean that translates into more aggressive marketing in the United States.
Next year, the manufacturer plans to introduce several new models, including a combination personal digital assistant and smart phone, a “WatchPhone” and it recently introduced a multimedia wireless device called the “Uproar.”
“A number of companies have attached PDAs to a phone device, but we looked at how users use them and then developed a PDA with telephone applications,” said Peter Skarzynski, senior vice president of wireless sales and marketing for Samsung Telecommunications America.
The WatchPhone, due out by spring, is voice activated and allows for one-digit dialing, he said.
The Uproar offers “full phone functionality, Web access, music and audio downloads for up to one hour of CD play or four-to-five hours of books on tape. It has camera and digital imaging capabilities. There is simultaneous usage of functionality or you can take or make a call, then go right back,” Skarzynski said at the recent UBS “Global Telecom” conference.
Since the elimination of carrier handset subsidies in South Korea, Samsung has held onto its 50-percent market share in its home country, he said. Nevertheless, demand for new phones there has dropped by about 60 percent. The situation will cause the manufacturer to work harder at expanding its presence in other markets, he said.
“The companies that have been hurt most are some of the smaller start-ups, which are having trouble gaining traction. This does give more of a rise to our export plans, and you will see us be more aggressive in Europe and North and South America,” he said.
“Europe is the next best for us in terms of margins. The U.S. market is the most aggressive. … In Europe, we have taken the model of the value-added sale to second and third time users looking for features, functionality and content, so we are not going after the prepaid customers.”
Worldwide, Samsung has 31-percent market share in CDMA handset sales, making it the leader in this technology, he said. Overall, the company has a market share of 6 percent to 7 percent. Along with Nokia Inc. and Siemens, Samsung has been able to increase share this year, while “a number of other well known companies have lost market share,” Skarzynski said.
Of the 20 million to 25 million wireless phones Samsung expects to have sold by year-end, about 9 million will be GSM phones. While categorizing Samsung as “a blip on the radar screen in GSM,” Skarzynski also cited steps the equipment maker is taking to advance its stature in this wireless standard.
In October, it announced an agreement to develop GSM phones for VoiceStream Wireless Corp. that will incorporate General Packet Radio Service and Microsoft Corp. browser platforms.
“We plan to ship our first GPRS phones in 2000 and are looking to be first to market with GPRS,” Skarzynski said.
“The real key for Samsung is to integrate many technologies into handsets. And if you’re not first or a close second, you’re nowhere.”
In South Korea, Samsung has contracts to supply the CDMA 1X handsets and network infrastructure to the two largest mobile carriers, SK Telecom and KT Freetel. SK Telecom is expected to launch commercial service sometime in November of this first iteration of third generation CDMA, he said.
Samsung also has demonstrated interoperability of its CDMA 1X handsets on Sprint PCS and Canada’s Bell Mobility networks, he added.
