July 23, 2006
Report pinpoints reasons for Korean phone makers' decline
Ask Korean cell phone makers why they're losing their market share overseas, and they will tell you it's because of their focus on top-end products or the strong won. JoongAng Daily reports.
"Some industry analysts, however, take a different view.
According to a report released by the LG Economic Research Institute yesterday, Korean firms are falling behind because they are oblivious to changing consumer demand and because excessive diversifying is eating into their cost competitiveness.
The institute noted that today's consumers are more interested in the "emotional" characteristics of cell phones such as the brand, design, and how the phone feels to the touch, whereas Korean firms are preoccupied with adding new functions.
.... The think tank also criticized Korean firms for having too many models. As of 2005, Nokia and Motorola had between 60 and 70 models while Samsung Electronics Co. and LG Electronics were producing some 90 to 110 different models.
... "Makers should cut down on costs by focusing on a making a ‘staple' model," said Park Jae-beom, a researcher at LG. "Companies also have to create a monitoring system for global consumer trends and needs. If they only focus on Korean consumers, they may lose the big picture."
The Permanent Link to this page is: http://www.textually.org/textually/archives/2006/07/013000.htm