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Korea's SKT suffers rare profit drop without iPhone

updated 04:05 pm EST, Thu January 28, 2010

SK Telecom cools without Apple device

Central Korean carrier SK Telecom on Thursday surprised the financial community by reporting a rare drop in profit already being attributed to its lack of the iPhone. Its net income was still healthy but dropped 7.2 percent to the equivalent of about $210.1 million, the first drop of any kind in the past nine months. Officials at SKT blamed the reduced numbers on extra spending for marketing and other promo deals to keep customers from defecting to rivals KT or LG Telecom.

Although not explicitly stated, the additional costs parallel determined efforts by SKT to address what it already sees as a shortfall triggered by KT's current exclusive for the iPhone. Among the steps, it has promised to sell numerous Android phones and add 2 million smartphone owners. It already took to cutting the prices of existing phones like the Samsung Omnia II but has had little to report in the way of success.

In contrast, KT has actually had to revise its fiscal estimates upwards for 2010 owing primarily to the Apple handset. Estimates have the provider selling more than 240,000 iPhones between November and January, quickly becoming one of the better selling smartphones in the country.

Most of the Korean cellphone industry is still dominated by conventional models and, until the recent availability of Android and later the iPhone, had its smartphone category dominated by locally-made LG and Samsung devices using Symbian or Windows Mobile. [via BusinessWeek]




by MacNN Staff

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Comments

  1. A grain of salt

    Joined: Dec 1969

    0

    It's their own fault

    The rejected the iPhone outright. Apple approached SK first and was told not interested. Since then all they have been doing is downplaying the effect it would have on the market. KT is laughing all the way to the bank

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