Pantech's North American Offensive

Move over, Motorola. This South Korean cell phone manufacturer is putting design muscle behind an audacious share grab in the U.S.

by Olga Kharif

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Michael Cost plots his next move from a workspace that spans 85,000 square feet but houses a mere 75 employees. If Cost has his way, the Cypress (Calif.) buildings won't be empty for long.

Cost, chief operating officer of mobile phone maker Pantech Wireless, is waging an increasingly aggressive campaign to transform South Korea's Pantech from a virtually unknown brand in the U.S. into a household name in a matter of years. And he'll try to ensure the office and warehouse space is teeming in no time.

NEW RELEASES

Pantech is already moving up the market share rankings on its home turf, and in emerging markets like Russia and Mexico. The world's No. 7 cell phone maker quietly opened a North American offensive more than two years ago, hiring staffers in the U.S. and Canada, leasing offices, and opening negotiations with carriers. The efforts are bearing fruit.

Judging by Pantech's efforts so far, market leaders Nokia (NOK) and Motorola (MOT) ought to take note. In recent months, providers Cingular, Alltel (AT), and smaller outfits Helio and Disney Mobile (DIS) have begun carrying Pantech-branded phones. The same goes for Canada's second-largest wireless carrier, Telus. In early October, Sprint Nextel (S) started selling Pantech's wireless data card for laptops, a sign Pantech's attack may not be limited to phones.

More Pantech-branded handsets are on the way. Cingular Wireless, the biggest U.S. wireless service provider, plans to announce a whole range of Pantech phones in the first half of 2007, says Glen Lurie, president of national distribution for Cingular, owned by AT&T (T) and BellSouth (BLS). Disney Mobile, a tiny wireless carrier catering to kids, will introduce another Pantech handset in November. In the coming weeks, Pantech will also release a QWERTY-keypad game phone and a special phone for seniors, with larger fonts and a simpler look and feel.

UPSWING

Cost wants to see Pantech follow in the footsteps of Samsung or LG, South Korean handset makers that have taken the U.S. by storm in recent years—only Cost wants to see it happen faster. "I'd love to see us get a double-digit percentage of Cingular's handset sales in the next 12 to 18 months," says Cost, who was a handset purchaser for Cingular before joining Pantech six months ago. That's pretty audacious for a brand that, according to researchers, had zero U.S. market share in 2005. Cingular doesn't say how many phones it purchases, but it had 57.3 million customers at midyear, and users are upgrading handsets with increasing regularity. "Our brand will become a household name," Cost says.