Mumbai: With Samsung Electronics Co announcing plans to invest $15 million in setting up a mobile handset unit in Haryana, with an initial capacity of 1-million units a year, the war between the two Korean Cheabols in handset manufacturing is set to intensify,
Samsung's facility that has the capacity to manufacture 1 million handsets at present will be expanded to make 20 million handsets by 2010, according to a Samsung spokesperson.
Eight years after LG and Samsung moved into the Indian market, LG has gained a 25.6 per cent share of India''s colour TV market, 33 per cent share of washing machines and nearly 29 per cent of refrigerators, according to industry data.
Samsung however, is ranked second in all three segments. Together the two companies have more than 40 per cent of these segments.
Samsung considers India as one of its top six strategic markets, and now its South West Asia regional headquarters. IT hopes to close FY 2005 with $1.4-billion revenue from India, including sales of telecom and IT equipment, which is nearly 2 per cent of its global revenue. It aims to raise sales in India to $5.5 billion by 2010.
LG, which sells top-end plasma colour TVs, Whisen air-conditioners, Dios refrigerators, computers and mobile phones, expects sales from its Indian operations to hit $1.9 billion in 2005, and reach $6.7 billion in 2010, up about 29 per cent each year.
Samsung has about 8,500 retail points in India and a presence in all towns and villages with a population of more than 100,000, according to Ravinder Zutshi, deputy managing director, Samsung India.
LG and Samsung are also aiming to replicate their success in consumer durables to mobile phones in India, where they are already among the top five handset makers, behind global giant Nokia.
India is the world''s fastest-growing major wireless market, adding nearly three million new mobile users each month. About 34 million handsets are expected to be sold in India in 2005, up 62 per cent from 2004.
LG Electronics earlier announced plans to establish a manufacturing unit in India to make CDMA handsets locally to cater to the domestic market. At present LG manufactures GSM handsets from its facility in Pune and is aiming to scale up production capacity of GSM mobile phones from one million now to 10 million by 2010.
"We are contemplating starting manufacturing CDMA handsets by 2006," said LG Electronics India Ltd Managing Director KR Kim, in a statement.
The company''s Pune plant now produces over one million GSM mobile handsets and will be expanded over the next couple of years.
Samsung has also announced plans to set up its R&D facilities in the country. "We are planning to double our investments in R&D next year," said Zutshi. The company has invested $12.5 million in R&D in 2005 compared with $12 million invested over the last four years since it began R&D operations in the country. While the headcount at Samsung''s R&D centres is expected to go up by 38 per cent, there will be increased investment on infrastructure and more indigenous design development for the Indian market, Zutshi added.
Samsung Electronics announced last month that it would make substantial investments in R&D and add about 30,000 people to global R&D staff by 2010, to further expand the company's capabilities in electronics, mechanics, and chemicals.