VK Corp braves overcrowded mobile market to expand in China

A South Korean handset maker believes it can survive in the mainland's over-crowded market for low-cost mobile phones by producing cheap but high-quality handsets.

VK Corp, which also makes rechargeable batteries, aims to increase monthly production from 200,000 units to 500,000 units next year - primarily in the budget segment. The company began making handsets in China last year.

VK Corp chief executive Yi Cheol-sang predicted mainland handset makers in the low-end segment would find it difficult to survive next year after the company launched three to four new GSM phones. The handsets would be priced at less than 1,000 yuan each but would be of better quality compared with phones manufactured by mainland rivals.

The Korean firm has set aside US$20 million to build a new plant in Xiamen to expand capacity.

'China is growing very rapidly in price competition, but there is still some room,' Mr Yi said. 'All the [domestically produced] cheaper handsets have some quality issues. But we can produce cheap but stable handsets.'

VK Corp presently focuses on the mid to high-end segment, where its handsets sell for between 2,000 yuan and 3,000 yuan each. It plans to launch 14 new models in this segment next year.