Samsung launches new cell phone despite fall in its market share

JAKARTA (JP): South Korean electronics giant PT Samsung Electronics Indonesia launched here on Friday a new model of its mobile telephone, the SGH-A100 amid its declining market share in the country.

Lee Kang Hyun, the company's general manager for marketing, said Samsung's share of the local mobile telephone market had dropped from an average of between 25 percent and 30 percent last year to only 10 percent at present.

"Our share of the mobile telephone market recently fell quite significantly due to the aggressive entrance of new models from competitors which are sold at a very cheap price tag," he told a news conference.

He estimated about 75 percent of the total mobile phone market was now controlled by low-end products, which he said sold at less than Rp 1.5 million (US$176) per unit.

"Such prices are clearly unreasonable. Many of our colleagues overseas have been very surprised, they thought these phones were rejects which were then imported and sold here," he said.

He also alleged a large number of distributors of other mobile phone brands were able to cut their prices because they were not paying the value-added tax charged on such products.

He said it was difficult for Samsung to compete with the new and cheaper products because it could not afford to cut its prices. "And because we pay the taxes," he added

"The policy of Samsung is to target the high-end of the market as well as the middle-end because it is important to develop a strong brand image," he said.

Lee said Samsung's sales of mobile phones, however, had continued to increase despite the decline in market share thanks to the enormous growth in local demand for mobile phones.

He said the company's sales of mobile phones rose from 300,000 units in 1998 to nearly 500,000 units last year.

"Despite all the problems with our market share, I am still optimistic that we will see an increase in sales this year," he said, adding that Samsung expected to sell a total of 800,000 mobile phone units this year.

He said the company has targeted sales of around 4,000 units per month for its new SGH-A100 model, which is also aimed at the high-end of the market.

The SGH-A100 is a dual band mobile phone with facilities which include a built-in IrDA, vibration alert, hands-free set and embedded modem. (cst)