From: Reuters
Published January 6, 2008 10:17 PM

Samsung considers cheap color phone to fight Nokia

SEOUL (Reuters) - Samsung Electronics Co Ltd said on Monday it is considering a low-cost mobile phone worth $40-50 that comes with color features to fight bigger rival Nokia

Samsung, the world's No. 2 mobile phone maker in the third quarter of 2007, gained market share last year by offering more medium- and low-cost phones, moving away from its previous focus on premium models.

"We are considering a $40-50 phone, if such a model can be cost-competitive," said a Samsung spokesman. "It targets Nokia in the emerging markets."

Samsung hopes to add the color feature on the proposed model but was still studying the project's feasibility, he added. "It's going to take some time to decide."

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The average selling price of Samsung's mobile phones stood at $151 in the third quarter, compared with the 2006 average of $176. Its market share is estimated at 14 percent or higher in 2007, up from 11.4 percent in 2006.

Samsung aims to sell 200 million mobile phones in 2008, compared with about 160 million in 2007, a company executive said in November.

As growth in the global handset industry slows, it will be crucial for Samsung to expand its presence in the largely untapped emerging markets.

Nokia, which has larger economies of scale and well-established distribution channels, enjoyed a lead in emerging markets such as India.

In advanced markets such as the United States, mobile phone makers face competition from the iPhone, Apple Inc's first phone.

Samsung seeks to take up to 25 percent of the global mobile phone market revenue by 2010, compared with about 15 percent seen for 2007, Samsung said in late November.

Shares in Samsung fell 3.53 percent to 520,000 won by 0224 GMT, compared to the wider market's 2 percent drop.

(Reporting by Rhee So-eui; Editing by Sei Chong)

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