Samsung Elec: Global Handset Mkt To Grow 7-8% On Yr '05

SEOUL (Dow Jones)--Samsung Electronics Co. (005930.SE), the world's third-largest maker of cellphones, estimates the global handset market will grow at a slower 7%-8% pace next year to 650 million units, from double digit growth this year.

Young-Man Ji, vice president of Samsung's telecommunication network business, said "70% of that growth will be driven by a replacement market."

He said while the growth rate in the worldwide handset market will likely slow down from this year, Samsung will continue to invest in marketing and research and development to produce high-end cellphones that include digital camera functions.

His comments came as Samsung unveiled a 5-megapixel cameraphone Wednesday, which it claims is the world's first.

Samsung had said previously that the global handset market is expected to reach about 600 million units this year, up from about 517 million in 2003.

The SCH-S250 model, will be sold in the local market only and will likely be priced between KRW900,000 and KRW1 million, a Samsung spokeswoman said. The cellphone, which weighs about 116 grams and carries 92-megabytes of built-in memory, will enable about 100 minutes of video recording, Samsung said. The phones will initially be available through wireless operator SK Telecom Co. (SKM).

Executives said a timeframe for when the phones will be available in the overseas market hasn't yet been determined.

The model took about a year and six months to develop, company executives said at the product launch in Seoul.

Samsung is planning to launch around 10 new models in the fourth quarter, Hyun Suk Chung, vice president of Samsung's telecommunications business, said on a conference call last week. This includes two new models for third-generation WCDMA (wide band code division multiple access) technology.

For the entire year, Samsung expects the number of new model launches to reach about 140 from about 120 last year. The company has so far unveiled 100 models globally. It is aiming for a global market share of about 14% this year, from nearly 11% at the end of 2003.

Operating margin from Samsung's telecommunications business, which makes telecom equipment in addition to mobile handsets, fell to 13% in the third quarter ended Sept. 30 - down from 16% in the second quarter and around 20% on year - partly due to increased marketing expenses at the Olympic Games in Athens, for which Samsung was an official sponsor.

-By Yun-Hee Kim, Dow Jones Newswires; 822-732-2165; yun-hee.kim@dowjones.com

-Edited by Sharon Vong and Jessica Tan

(END) Dow Jones Newswires "

Posted to the site on 20th October 2004