Reign-who'? Think Rio
MP3 music maker bursts onto the Kosdaq
"We could not afford to carry advertisements on television or newspapers, so we focused on Internet advertising. We owe much to our young customers who wrote reviews on the Internet boards," said Yang Deok-joon, 52, the president and chief executive officer of ReignCom,
The MP3 player manufacturer has emerged as a Cinderella on the Seoul stock market; it was listed on the secondary Kosdaq market yesterday. The stock opened at 94,000 won, double the price of its initial public offering. Fifty seconds after trading begun, it stopped. The share price reached the daily 12-percent limit and closed at 105,200 won.
The 1.6 million shares, a 24-percent stake, that Mr. Yang holds in ReignCom are worth more than 160 billion won ($134 million). He launched the company in early 1999 with 50 million won in capital.
ReignCom is now the top MP3 player maker in Korea, with a 50-percent market share. The company also has a 22-percent world market share, although it began to make the portable digital audio device only three years ago. The company began producing units under its own brand name, iRiver, in January 2002.
In the last two years, the company has overtaken Samsung Electronics Co., Phillips and Apple Computer in sales.
Before founding ReignCom, Mr. Yang worked at Samsung Electronics for 20 years. The company first distributed semiconductors, but then began making MP3 players. "I judged that devices reproducing digital images, sounds and other content would prevail," he said.
ReignCom had difficulty securing distributors for its own products so it began to supply them to the U.S.-based SONICblue under the brand name Rio. In January, 2002, the company also launched its own brand.
"In particular, we did our best in after-sales services," said Jo Yong-jun, an official at ReignCom. "We repaired and delivered our units to customers' homes and offices at our expense."
An Internet advertisement with the theme, "Sorry, Sony" also got the company some attention here.
Mr. Yang said he expected MP3 players to evolve from the current simple audio devices to comprehensive digital content reproducers. "We will launch an MP3 player that can be used also as video and game player next year," he said.
Mr. Yang said that ReignCom was outsourcing its production; he judged the company's production prowess as weak.
Research and development is being conducted in the company, but the design of the players is handled by Innodesign, a domestic design company. The iRiver is produced in China.
Sales figures at ReignCom have jumped 263 percent per year on average since 1999. Net profits have soared by 518 percent per year.
The company forecast that its revenues would reach 230 billion won this year; the figure is three times the company's revenues in 2002.
by Kim Jun-hyun <symoon@joongang.co.kr>
2003.12.20
