Outsourcing to China
Pantech, which is attempting to sell distressed assets, aims to make a comeback by targeting the low-priced smartphone market. Its low-end smartphones are going to be manufactured by Chinese company BYD.
“We are working on a global project to produce low-priced smartphones through outside companies,” said an official at Pantech on Dec. 23. The official added, “If companies specializing on consignment production like BYD make our products, the price of parts could be much lowered. So, it will be possible to sell smartphones below US$200.”
The money-strapped company already established strategies to sell low-priced smartphones, and is finalizing its plan to produce them in China. They are expected to be mass-produced by BYD in as early as February of next year.
Pantech, which failed to sell its business in preliminary bidding, is looking for a buyer through the second bidding. The troubled company has considered selling its products overseas in order to make a comeback due to the unpredictable nature of its business sale. Pantech has turned its attention to the overseas market, owing to the changed market conditions in the nation and the implementation of the Act on improving the distribution channel structure of terminals.
The handset maker is planning to offer competitive prices for its products using its technical skills and expertise in emerging countries where there is a huge demand for low-priced smartphones. To achieve its goal, Pantech is going to buy low-cost chips like Snapdragon 200 to 400 series processors and to secure necessary parts and equipment from BYD. The world's number one AP maker, Qualcomm, owns an 11.96 percent stake in the Korean company.
BYD has 20 production facilities throughout China, manufacturing different types of electronic parts. Last year, Samsung Electronics revealed that the Chinese firm is producing its phones to expand and diversify the number of entry-level models. In the past, Apple also announced that BYD is one of its suppliers.