Sam­sung-ap­ple fight cre­at­ing win­ner in Korean Air

The Pak Banker - - COMPANIES/BOSS -

Sam­sung Elec­tron­ics may ship about 44 mil­lion of the smart­phones in the sec­ond and third quar­ters, ac­cord­ing to Young Park, an an­a­lyst at Woori In­vest­ment & Se­cu­ri­ties Co. in Seoul. A Boe­ing Co. 747-8 freighter plane car­ry­ing noth­ing else can hold about 1 mil­lion phones.

Mo­bile phones are one of the top three prod­ucts that are moved by air in South Korea, home to Sam­sung and LG Elec­tron­ics Inc.

Sam­sung aims to take mar­ket share in the $358 bil­lion mar­ket from Ap­ple's iPhone 5, which was in­tro­duced last year. Ap­ple's sales growth last quar­ter was the slow­est in more than two years. A worker uses a fork­lift to move pack­ages ar­riv­ing from China at a Korean Air Lines Co. cargo ter­mi­nal at In­cheon In­ter­na­tional Air­port in In­cheon, South Korea. Mo­bile phones are one of the top three prod­ucts that are moved by air in South Korea, home to Sam­sung and LG Elec­tron­ics Inc.

Mov­ing high-value goods such as a smart­phone by air quickly to var­i­ous mar­kets is im­por­tant for Sam­sung to cap­ture mar­ket share when the prod­uct has max­i­mum de­mand. The in­tro­duc­tion will likely re­verse a two-year de­cline in freight sales at the Seoul- based car­rier, the world's sec­ond-big­gest in­ter­na­tional cargo air­line.

"The Galaxy can pro­vide Korean Air (003490) with the re­lief it needs dur­ing th­ese dif­fi­cult times," said Joo Hae Mee, an an­a­lyst at LIG In­vest­ment & Se­cu­ri­ties Co. with a buy rat­ing on the air­line. "While the in­tro­duc­tion of one prod­uct isn't enough to make a full re­cov­ery, given the dire sit­u­a­tion of the cargo in­dus­try world­wide, this is pos­i­tive."

The global air-freight mar­ket shrank 1.5 per­cent in 2012 for a sec­ond con­sec­u­tive year and air­lines were fill­ing less than half of their cargo planes, ac­cord­ing to the In­ter­na­tional Air Trans­port As­so­ci­a­tion. Hurt by the eco­nomic slow­down, cargo car­ri­ers such as Cathay Pa­cific Air­ways Ltd. (293) have turned to highvalue items like di­a­monds be­cause mov­ing low-tech­nol­ogy goods is adding lit­tle to prof­its.

Mo­bile phones are one of the top three prod­ucts that are moved by air in South Korea, home to Sam­sung and LG Elec­tron­ics Inc. (066570) Air­lines haul about $5 tril­lion an­nu­ally of to­tal cargo, ac­count­ing for a third of the global trade in terms of value, ac­cord­ing to IATA.

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