Samsung not competing in cheap phone market--CEO

Samsung will be very selective in choosing new markets for its mobile phones and will not take on handset leader Nokia in the cheapest models, Samsung CEO Yun Jong-yong, quoted by a Reuters report, said.

The Reuters report also quoted the executive as saying that the South Korean group, the world's third-largest maker of mobile handsets, only chose markets and customer segments where it believed it could succeed.

Focusing on cheap phones would not fit its brand image, but with 60% to 70% of future mobile handset sales forecast to be in developing markets, Samsung could not ignore them, he said.

Nokia and Motorola benefit from economies of scale by making large quantities of each model, but Samsung had the advantage of making its own screens and memories, so did not lose profits to subcontractors, he was also quoted by the Reuters report as saying.

Samsung reported that it sold 34.8 million mobile phones in the first quarter, helped by stronger sales of lower-end models in China and other new markets. Its mobile phone margins rose to 13% from a revised 7% in the fourth quarter, though average selling prices fell by 8%, the Reuters report added.

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