Electronic Companies “Embracing Europe”

Why Europe?―

Mobile phone maker Pantech officially announced yesterday the establishment of a Europe branch . When asked the reason for the establishment, executive director Jeon Hyun-soo, who has been designated head of the Europe branch, answered, “We cannot be top players unless we jump into the European market.”

Europe is the native place of mobile communication. Among the 680 million mobile phones that were sold worldwide last year, 485 million were GSM phones (mobile phones based on the European communication system). This is over 70 percent of total sales.

Moreover, a third-generation service will kick off in Europe this year. In addition to Hutchison, other companies such as Vodafone and T-Mobile have joined the league. An increase in demand of 50 million worldwide―22 million in Europe alone―is expected.

Europe is a rising market for home appliances as well. The market is growing with the expanding EU and the westernization of Eastern Europe.

Choi Ji-sung, president of Samsung Electronics Digital Media, explained, “Europe has the symbolic significance of being both a market that shows 30 percent growth each year and a competition ground for the world’s best products.” This means Europe’s number one company should be regarded as the world’s best.

Kim Jong-eun, president of the European division of LG Electronics, pointed out the matter of exchange rates. He said Korean electronics companies cannot but compete in Europe because the Euro is rising in value.

The Time has Come―

Philips, a world power in digital home appliances, made news when it did not participate in “CeBIT 2005” held in Hannover, Germany. Some sources pointed out the burden of costs, while some guessed that the company had no products to come up with. Experts in Korean companies point out that not only Philips, but also other European native companies such as Grundig and Thomson are slowing down.

The slump in European companies is an opportunity for Korean companies. They have an advantage in that they have been enhancing their image with top-class mobile phones.

Kim In-soo, vice-president of the European division of Samsung Electronics, explained, “The brand recognition that we have achieved through our mobile phones is helping enhance the image of the rest of our digital media products.”

With Strategies Fit for Europe―

LG Electronics recently established a design research center in France. Han Sang-wook, general manager of the marketing group of the European division, said, “We re-organized our structure and work to resemble the merchandising methods of Europe,” and added, “The design research center has a crucial role.”

In North America, large projection TVs make up 50 percent of the total demand, but in Europe where houses are small, it is only four percent. There is a limit in allotting products by region from Seoul to enhance quality and decrease costs in the name of global management.

Samsung Electronics’ Vice President Kim In-soo said, “We have graduated from low-priced products. We will compete with premium products starting this year.”

Suk-Min Hong smhong@donga.com