The Korean Mobile Phone Industry: The Case of Pantech

Pantech started as a pager maker in 1991, and then entered into the mobile phone market in 1994. It was considered as an upstart in Korean mobile handset market where chaebols like Samsung Electronics and LG Electronics had dominated. It had grown into a globally renowned cell phone producer in a record short time. Although it was number three mobile phone maker in the home market, most of the company’s sales came from overseas through ODM relationship with global companies such as Motorola. It became the eighth largest cell phone maker in the global market in 2003. Pantech was one of the first in Korea to introduce its mobile phone with built-in camera, which helped the company in building its brand. Pantech offered a role model for SMEs to follow for competition against chaebols in its heydays.

However, Pantech’s performance decreased in the market and faced hardship owing to poor managerial decision making. It has been rescued with debt workout program, and it is trying hard to turn things around. The Pantech case shows how SMEs could disrupt the established leaders with fresh product features and sophisticated design quality. It also displays how hard it is for Korean SMEs to compete against chaebols and MNCs armed with strong technological confidence and marketing power in the major industries.

Note: A part of case analysis on Pantech is shared due to the proprietary nature of the content.