LG, Samsung to clash in MP3 player market
LG Electronics Inc. is moving to strengthen its presence in the local MP3 player market in an apparent countermove against industry leader Samsung Electronics.
LG Electronics, the country's second-largest electronics maker, plans to launch its own production line of MP3 players by the end of June. This is a notable change in strategy for the company, which is currently supplying its line of MP3 players from other manufacturers.
Earlier this year, Samsung announced that it would enhance investment into the MP3 player business this year to claim back the No. 1 position from ReignCom Ltd. in the global MP3 player market.
Samsung, which sold around 1 million MP3 players internationally last year, aims to double its global sales while gaining more than 40 percent of the Korean market to unseat ReignCom.
ReignCom, which owns 50 percent of the domestic market, is the international leader in sales of flash-memory chip MP3 players, selling more than 1.2 million units last year for a 25 percent global market share. ReignCom revenues nearly tripled in 2003, while its profit rose fivefold to $36 million.
"The MP3 player is expected to evolve into a versatile entertainment device that could be used for digital broadcasting and other multimedia functions," said an analyst from Daewoo Securities.
"The competition between Korean manufacturers, which lead the international industry in flash-memory MP3 players, is expected to heat up during this year," he said.
The domestic market for MP3 players increased by 49 percent last year and expects for a 29 percent expansion for this year. Analysts predict that the market will increase by an annual rate around 30 percent through 2007.
Korea's MP3 player exports rose significantly last year. The Electronic Industries Association of Korea attributed the increase to enhanced product quality. By October, exports of MP3 players stood at $128 million, compared to $89 million in the same period in 2002.
(thkim@heraldm.com)
By Kim Tong-hyung
2004.03.23
