Sunday, January 14, 2007

Samsung's iPhone?

Apple's introduction of the iPhone is both a competitive challenge and a market opportunity for Samsung, executives at South Korea's largest corporation said Friday.

"Since it's new it could bring both sides, positive and negative," said Kim Jeong-han, senior vice president for Samsung Electronics Co.'s telecommunications business told a conference call after the company released its fourth-quarter earnings results.

Apple Inc. CEO Steve Jobs on Tuesday unveiled the iPhone, signaling the Cupertino, Calif.-based company's long-awaited entry into the mobile phone business.

The ultra-thin iPhone is controlled by touch, plays music, surfs the Internet and runs the Macintosh computer operating system among other functions. The company plans to begin shipping it in June.

Kim said that the iPhone will be able to penetrate the high end of the mobile phone market. Samsung, the world's third-largest manufacturer of mobile handsets, is a key player there with multifunction models like the BlackJack and Trace.

"But still we have an opportunity," Kim added as Apple's promotion of the device "means demand will be created" which could also benefit Samsung.

"So we will continue to introduce a variety of specialized function phones in the multimedia area," he said.

Samsung is the world's largest maker of memory chips and also a top producer of consumer electronics. Besides handsets, it manufactures flat-screen televisions, MP3 players and laptop computers.

Suwon, South Korea-based Samsung already provides NAND flash memory chips to Apple for its hot selling iPod digital music players and could potentially supply the chips for the iPhone as well.

An expanded music phone market spurred by the introduction of the iPhone "will create lots of demand for NAND flash," said Lee Min-hee, an analyst at Dongbu Securities in Seoul.

Chu Woo-sik, senior vice president and head of Samsung's investor-relations team, was optimistic about the iPhone's potential impact, but refused to offer details about what it could mean for Samsung in terms of supplying components like NAND chips.

"It seems iPhone will be using the whole spectrum of memory chips," he told the conference call, adding that depending on its success, the device could "have generally a very positive impact on the overall market and for the industry as a whole."

Chu cautioned, however, that Samsung could not comment "regarding the component supply aspect of iPhone."

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