Slow Handset Shipment Volume Growth for South Korean Vendors

Korea Investment & Securities has reported that Samsung and LG Electronics's handset shipment volumes rose 4.9% and 12.0% MoM, during May respectively. However, Samsung's shipment volumes barely reached 9 million units. LGE's shipment volumes of its Chocolate phones and UMTS phones grew significantly, however, its overall growth rate was weak due to lower shipment volumes in North America.

In June, the research firm says that Samsung's handset shipment volumes should display full-scale growth, up 14% MoM to 10 million units. Given that SEC's handset shipment volume target is 115 million units; the inventory adjustment in December should be mild.

Despite a rebound in handset shipment volumes in June, Samsung's 2Q handset shipment volumes should drop 8.3% QoQ to 26.6mn units. Korea Investment & Securities says that it expects Samsung's operating margin to tumble to 6.5%, due to lower demand and a lack of hit models.

In May, shipment volumes in the domestic handset market rose 7.5% MoM to 1.14 million units, on higher demand for terrestrial DMB Phones due to the World Cup. LGE's handset shipment volumes rose 35.6% to 240,000 units, on the back of LGT's low-rate "Giboon Zone" service. SEC's and LGE's market shares increased, while Pantech's market share declined."

Posted to the site on 20th June 2006