Part of Samsung's response was to come up with handsets resembling cosmetic cases. To widen the appeal, the company released the phones in ivory and pink, embossing the cases with a rose design.
"Big markets like Europe are becoming saturated, but we believe we can rejuvenate demand by developing new applications and content," said Park. "Consumer behavior doesn't change that easily. You have to give them a good reason." Creating that novelty phone isn't getting any easier, especially since Korean service providers slashed handset subsidies, subsequently boosting the price of the devices.
Strapped for cash
The companies that provide mobile-phone services haven't been much help either. In particular, European phone service providers pledged more than US$100 billion for licenses for high-speed wireless Internet services, leaving them little cash left for promotions to attract new subscribers through offers of cheaper handsets.
Samsung responded by introducing 12 new models this year, while rivals focused on trying to shift inventories of low-priced models, Park said.
In turn, Samsung stepped in to sign up new service provider customers such as Verizon Communications Inc. The New York-based company sought to capitalize on the popularity of Samsung models sold by rival Sprint PCS, a division of Sprint Corp, Park said.
Samsung moved a team of 40 engineers to work with newcomer Sprint to design phones that would help it to market itself as a specialist in mobile data. Samsung still supplies Sprint with more than half its handsets.
Samsung's local customers, who have helped it wrap up more than 60 percent of the local market, already persuaded more than 1 million of their subscribers to buy phones able to access the Internet three times as fast as most computers. This rush to buy the latest technology has nonetheless made Park cautious about yet faster new services to be provided using radio frequencies bought in multi-billion-dollar auctions this year.
The main problem: even the fastest phone and network don't allow users to do much more than check stock prices, download simple cartoons or use set their phones with a new bell sound.
"We must develop applications and contents that are relevant to people's lives and differentiate the product," he said.
One analyst believes Samsung is the best placed to do that.
"I basically don't like the handset business because competition is very fierce," said Koo Bon-jun, an analyst at Morgan Stanley Dean Witter in Seoul. "But Samsung's strategy of targeting the high-end market seems to have worked."
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