By Kim Tae-gyu
South Korea’s mobile handset manufacturers are reaching deep into their pockets to boost research and development (R&D) in an effort to survive stiff competition at home and abroad.
Industry sources on Friday said Korea’s major cell phone makers _ Samsung Electronics, LG Electronics and Pantech Group _ each seeks to increase its R&D workforce by more than 35 percent this year.
Samsung, the world’s third-largest mobile handset maker, is aiming at bolstering the number of cell phone-related researchers to over 3,000, up 36.4 percent from last year’s 2,200.
As of the end of last year, smaller rivals LG and Pantech retained 1,800 and 1,300 R&D staff, respectively, but are looking to boost the numbers to 2,500 and 1,800 by year-end.
Mid-tier makers are also jumping onto the bandwagon of full-blown R&D investment. SK Teletech, a handset-making affiliate of Korea’s top mobile carrier SK Telecom, is set to enlarge its pool of researchers by 31.6 percent to 500.
``To stay afloat in the fast-moving handset industry, the size of the R&D workforce does matter. Companies must be crammed with top-of-the-crop researchers to stay ahead of the curve,’’ said Kim Kyung-mo, a telecom analyst at Mirae Asset.
``Especially in an era when cell phones are increasingly evolving to become a personal gateway, equipped with various compelling features like camera, broadcasting or music functions, only R&D provides genuine power,’’ Kim added.
Another reason for the heavy investment in research is the preempting of the international blitz on developing new technologies, which can land windfalls in the name of intellectual property rights.
``Although Korea’s cell phone makers have chalked up sputtering growth over the years, high royalty charges always pose a serious threat to them. Our companies will now try to avoid such awkward situations by taking the initiative in the development of next-generation technology,’’ said Greg Roh, an analyst from Dongwon Securities.
Domestic handset providers have paid large chunks of their hard-earned revenue to mobile source-technology holders, which subsequently chips away at their bottom line.
In line with ballooning research spending, security problems are also being raised as shown by a recent failed attempt at cell phone technology espionage.
The law enforcement authorities said this week seven researchers of a local handset maker attempted to sell key technology to a Hong Kong firm in return for cash and stock options.
``As our level of technology is raised through intensive research efforts, foreign players are trying to close the gap with easy methods. We will strengthen our security,’’ said an official of the cell phone maker which narrowly escaped the technology leakage.
Source: Korea Times
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