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Samsung to Unseat Motorola as World's No. 2 Handset Maker

23 August 2004 by axxxr
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Samsung Electronics is expected to unseat mobile phone giant Motorola as the world’s No. 2 handset maker
in the third quarter to September with sales of 23 million units. The Korean technology firm’s profit margin, however, is projected to be deteriorating as stockpiles of its unsold mobile phones build up in the U.S. market, and the average selling price (ASP) falls sharply.

According to the industry Monday, Samsung Electronics is expected to sell over 23 million units in the third quarter, as sales of its new "SGH-800," released in Europe targeting the 2004 Athens Olympics, are proving strong. For August, sales are at 7.2 million units.

This is due to the better than expected marketing effect, which took advantage of Samsung’s official Olympic sponsor status, and growing popularity for its brand new product "SGH-E800," a souped-up version of the firm’s best selling model "SGH-E700."

On the other hand, sales of Motorola is expected to fall to 22.8 million units in the third quarter from 24.1 million in the second quarter, burdened by a glut of unsold products in the South American and Chinese regions. Analysts expect the trend to continue until the early fourth quarter when Motorola rolls out new models.

Accordingly, Samsung is to overtake Motorola as the undisputed global No. 2 handset maker both in revenues and sales volumes, the industry sources said.

The Korean technology firm’s ASP would decline sharply, however, as U.S. major mobile carrier Verizon Communications is currently holding a "Buy one, Get one free" promotion, in which customers who buy Samsung’s SCH-A610, 650 models with two year contracts would get another one for free.

Industry sources said, “Though Samsung would clench a feat to outstrip Motorola for the first time ever even by a slightest margin, it’s deteriorating profit margin means the firm now faces a new challenge to put profitability at the forefront.”

 

Via:chosun.com




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