Ferraris for smartphones as Korea handset makers battle

Wed Jul 6, 2011 2:51am EDT
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SEOUL (Reuters) - Want a Ferrari, a notebook PC or tickets to a Mediterranean cruise? Buy a South Korean smartphone.

These are just a few of the more flamboyant of many temptations dangled in front of prospective smartphone buyers as small South Korean handset makers fight to draw consumer attention from global giants such as Samsung Electronics, LG Electronics and Apple.

A lucky South Korean university student recently won a Ferrari in a draw sponsored by domestic handset maker Pantech.

The company gave away the nearly 400 million won ($375,500)car as part of efforts to lure potential customers to its Vega Racer smartphone, which it claims is equipped with the world's fastest application processor.

Rival KT Tech, a handset unit of no. 2 mobile carrier KT Corp, last week offered two smartphones at one price -- but only to twins, a promotion of its new Janus smartphone, Janus, which it claims to be the world's first smartphone equipped with 1.5 GHz dual core processor.

Smartphone penetration is expected to jump to 42 percent this year, from just 2 percent two years ago, heating up the already keen fight for customers still further. "We cannot compete head to head with Samsung and Apple with normal marketing strategy and features... The Ferrari, which symbolizes speed, goes well with our product," a Pantech spokesman said. The Vega Racer features a 1.5 GHz dual core processor.

For yet another promotion, Pantech on Friday launched an event to pick one buyer of its Vega Racer to send on a trip to Ferrari World Abu Dhabi, a Ferrari theme park in the United Arab Emirates. The moves appear to be paying off. The Vega Racer, which was rolled out on June 10, is selling well, with daily sales reaching 5,000 units and pushing Pantech's total smartphone sales to a record monthly high in June.

The battle has become so fevered that even smartphone units of global firms are joining with promotions of their own.

KT Corp has, according to media reports, offered a notebook PC, an LCD monitor or a gift certificate to people who bought some LG Electronics handset models in an effort to promote lagging sales, while the South Korean unit of Motorola will give three buyers of its Atrix smartphone cruise tickets to the Mediterranean or Alaska. ($1 = 1065.250 Korean Won)

(Reporting by Jin Hyunjoo; editing by Elaine Lies)