KEY POINTS:
Samsung Electronics will be very selective in choosing new markets for its mobile phones and will not take on handset leader Nokia in the cheapest models, Samsung Chief Executive Yun Jong-yong said in an interview published on Sunday.
"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," Yun told Finnish daily Helsingin Sanomat.
He said the South Korean group, the world's third-largest maker of mobile handsets, 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 per cent of future mobile handset sales forecast to be in developing markets, Samsung could not ignore them, he said.
"We aim in these countries for high low-end products," he told the paper, referring to "luxury versions" of cheap phones.
Finnish-based Nokia and Motorola of the United States benefit from economies of scale by making large quantities of each model, Yun said, but Samsung had the advantage of making its own screens and memories, so did not lose profits to subcontractors, he said.
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 per cent from a revised 7 per cent in the fourth quarter, though average selling prices fell by 8 per cent.
- REUTERS
