Samsung Bringing 3G Phones To Europe

South Korea's Samsung Electronics said on it will debut with a third generation mobile phone on the European market in the third quarter of 2003, using a Qualcomm chip that was announced last week.

Inset is the Samsung N400 3G phone to illustrate the type of phone on its way to Europe.

Samsung is the world's fastest growing mobile phone maker, with a ten percent market share trailing behind Nokia and Motorola.

It also said it expected moderate growth in the global cellphone market to 435 million units in 2003 from some 410 million units this year.

"It will be modest growth. Next year global demand will be 435 million units," Senior Vice President of Samsung's telecommunications division, Park Sang-Jin, told Reuters in an interview.

He reiterated Samsung would continue to gain market share, although he declined to give a forecast, saying India and China would be the fast growing markets next year.

It would cater to these markets by launching ower-end phones rather than its usual mid- and high-end models.

Fat profit margin
"We're going to have phones for those markets which would be considered mass market models in the West," he said.

Thanks to its high-end product mix, Samsung has the fattest profit margin in the handset industry, beating even Nokia's 22 percent with a 26.8 percent operating margin.

The company also shed light on its launch plans of a future series of smartphones based on software from three different vendors: U.S.-based Palm and Microsoft, and Britain's Symbian.

Showing prototypes of Microsoft and Palm phones, Park told Reuters his company will take the Microsoft smartphone to production by the third quarter of next year.

"Most demand (for the Microsoft smartphone) will come from the North American market," he said, noting it would benefit from the recently upgraded fast wireless CDMA2000 1x networks in the American markets.

Smartphone potential
The phone can download video clips, handle email and instant messaging,

Park played down the potential for smartphones in the European market where the upgraded GSM voice networks to faster data-enabled GPRS networks were still not fast enough to use data-intensive functions like streaming music.

He expected the move in Europe to faster Wideband CDMA networks, the next step up from GPRS and known as third generation, would be slow.

Samsung would still launch a W-CDMA handset in Europe, because it needed an almost identical phone in its Korean home market where two different kinds of third generation networks will be used.

"The W-CDMA phone we're going to introduce by the third quarter of next year, with the Qualcomm chip," will be able to handle almost all available second and third generation wireless networks, he said.

He warned that the high cost of the chip and the slow roll-out of W-CDMA in Europe and elsewhere would not make it a big seller. So far only Japan's NEC has a W-CDMA phone for the European market, while Nokia and Motorola have announced W-CDMA handsets for next year.

European telecoms carriers have slowed investments in third generation networks to boost their battered balance sheets, hurt by a 100 billion euro bill for third generation radio spectrum licenses in 2000.

"European carriers have been penalized by the license auctions," Park said, adding that U.S. and Asian markets were overtaking Europe in wireless services.