South Korean Cell Phone Manufacturing Sector Slumps 20.7%

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South Korean Cell Phone Manufacturing Sector Slumps 20.7%

3:05 pm on July 22, 2007 | Category: Business, Wireless Technology, Mobile Devices, Cell Phones

South Korea’s cell phone manufacturing sector slumped by more than 20% in the first five months of 2007, according to data from the country’s National Statistics Office (NSO). Only 68.7 million handsets were manufactured during the period, compared to 86.2 million in the first five months of 2006.

Problems with one manufacturer, Pantech Curitel, may be partially responsible for the decline, but do not fully explain such a sudden and sizable slump. A growing trend towards outsourcing, where handset makers move operations to developing countries where labour is cheaper, may be largely to blame.

South Korea’s two largest handset makers, Samsung and LG, have pledged to maintain their primary factories in the country, which should limit long-term losses in the cell phone manufacturing sector.