South Korean Handset Shipments Rise in August

Korea Investment and Securities has released their monthly report on South Koreas handset market and have projected that that Samsung Electronics' and LG Electronics' shipment volumes grew 11.4% and 5.1% MoM, respectively in August. Especially, with the higher portion of high-end models (SEC's Ultra Edition and LGE's 'Chocolate' phone), average selling prices also increased and thus the value of handset exports surged. Samsung is currently launching promotion for its Ultra Slim phone in Europe, China, and Southeast Asia while LG shipped more than 500,000 of its 'Chocolate' phones to Verizon Wireless.

Meanwhile domestic handset sales are estimated to have slipped 3.4% MoM in August on weaker replacement demand following the summer vacation. Samsung's and LG's respective market shares fell to 50% and 21.4%, while Pantech's market share climbed to 20%.

KIS says that it expects the domestic handset market to show a slight recovery in September, led by strengthening slim phone and terrestrial DMB (digital multimedia broadcasting) phone line-ups.

With favorable market conditions, they believe that Samsung will be able to record handset sales of 30 million units and an operating margin of more than 10% in 3Q.

LGE should also achieve an operating margin of 2% or higher, if sales of its 'Chocolate' phone remains robust in North America and Latin America. In particular, LG's operating margin should continue to grow on the back of the shipment volume increase of its UMTS phone in 4Q06."

Posted to the site on 14th September 2006