Samsung Aims for Higher End of Cheap Phone Market

Samsung Electronics Company Limited will be very selective in choosing new markets for its mobile phones and will not take on handset leader Nokia in the cheapest models, said Samsung Chief Executive Yun Jong-yong: "Nokia is very strong as a maker of cheap phones. We cannot compete against it in those (models). That's why we are very choosy." He said the South Korean group only chose markets and customer segments where it believed it could succeed. Focusing on cheap phones would not fit its brand image, but with 60-70% of future mobile handset sales forecast to be in developing markets, Samsung could not ignore them. He noted that Samsung would aim for the more luxurious of low-end products in such countries. Yun said Samsung has the advantage of making its own screens and memories, meaning the world's third-largest maker of mobile handsets does not lose profits to subcontractors.

Samsung reported on Friday that it sold 34.8 million mobile phones in the first quarter, helped by stronger sales of lower-end models in China and other new markets. Its mobile phone margins rose to 13% from a revised 7% in the fourth quarter, though average selling prices fell by 8%.

News source: eWeek

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