Samsung Electronics eyes MP3 player market
Samsung Electronics Co., Korea's largest electronics maker, said it plans to strengthen its MP3 player business this year to claim back the No. 1 position from ReignCom Ltd. on the domestic digital audio equipment market.
Choi Ji-sung, president of Samsung's digital media division, said, "MP3 player is a crucial item for digital convergence technology and the company will nurture MP3 into a core digital media business that puts together multimedia, memory and digital music."
Samsung aims to double the revenue from its MP3 players and increase its domestic market share to 40 percent or more by the end of this year to unseat ReignCom from the top slot.
MP3 is a popular audio compression format on the Internet, and a host of Korean player manufacturers lead the global flash-memory-based MP3 market.
The move is drawing keen interest from the country's IT industry since Samsung used to be indifferent to what it viewed was a niche segment. Over the past four years, Samsung has remained in the top league of the market here but did not commit massive investment, nor did it stage serious marketing.
Instead, former Samsung engineers and development team members left to establish MP3 player start-ups, paving the way for the growth of the digital audio player segment. Samsung continued its MP3 player business by securing the latest models from such manufacturers on an original equipment manufacturing basis.
Now, the sector is growing quickly and some high-flying players are raking in cash, which seems to have sent a wake-up call to Samsung.
For instance, ReignCom, the Seoul-based digital audio equipment maker, had Korea's most successful initial public offering this year. As a global frontrunner on the MP3 player market, the Kosdaq-listed company is now touting its snazzy brand iRiver.
Samsung's belated move to beef up its MP3 came as U.S.-based Apple Computer Inc. received 100,000 orders for its iPod mini digital player, which went on sale yesterday. Apple has turned its sleek and powerful iPod player into a cash cow, while snatching a market-leading position among digital audio players.
Samsung, the world's largest DRAM computer chip maker, also leads the flash-memory market, which is directly linked to portable digital audio players.
Samsung said it would introduce about 20 new MP3 player models this year. In addition to the domestic market, Samsung plans to market its products in Europe, Russia and Southeast Asia. To that end, it recently revamped its MP3 development team, doubling its manpower to promote its YEPP brand of players.
In 2003, Korea's MP3 market was estimated at 1.2 million units and the global market was 5 million to 8 million units.
Some Korean MP3 player makers including Samsung are set to introduce a new players featuring hard-disk drives that can store more than 20 gigabytes of digital audio.
By Yang Sung-jin
(insight@heraldm.com)
2004.02.21
