Focus: To be Top Korean Player in Overseas Markets
The development of domestic IT industries is indebted to the rapid expansion of the Internet which has become an essential part of daily life, including entertainment. MP3 technology is one of the most popular offshoots of the Internet. Since the appearance of MP3 players on the market a few years ago, the industry has recorded remarkable growth. Among domestic MP3 player manufacturers, iRiver Co., Ltd. (www.iriver.co.kr) is highlighting its name in the global MP3 player markets with a high-end, high-price strategy.
by Lee Kwang - jae, Reporter / voxpop@ittimes.co.kr
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iRiver has created history as domestic venture business since its inception. The company was established in July 1999 to create global brands in digital convergence fields as an affiliate of Reigncom. Beginning with seven employees and W300 million in total invested capital, the company began by manufacturing MP3 player-related chips.
In 2000, the company started manufacturing MP3 players. The first domestic MP3 player manufacturer was MPMan, which had MP3 player source technology. But iRiver, a latecomer, won the competition to build a strong foothold for its brand. iRiver's innovative MP3 player design made a great contribution to its success. From the beginning, iRiver focused on the development of elegant and high-grade MP3 players, able to match diverse clothes and accessories. Its strategy resulted in great success as customers willingly paid a higher price.
iRiver MP3 players received design awards from such diverse organizations as the Korea Institute of Design Promotion, the Digital Times magazine, the Sports Seoul newspaper, CJ Home Shopping and KMA Consultants.
iRiver's innovative distribution network was another key factor enabling its success. Traditionally, consumer electronics products have depended on large distributors. But iRiver went a different way - it actively developed alternative channels such as the Internet and home shopping TV networks from the beginning because the company thought the main users of MP3 players were very familiar with the Internet. The company also handled customer service through the Internet. Even firmware services, which upgrade the performance of supplied products, were provided through the Internet.
The third factor in its success was its technical effort to deliver better audio quality. The company offered only high-end earphones as a package. The product line of iRiver has great customer appeal due to a wider diversity in designs, memory capacities and prices than those of its competitors. Contending with such competitors as Samsung, Cowon Systems and Digital Ware, the company took 52 percent of the domestic market to become the top player in 2003. This year, the company is targeting a 60 percent share of of the domestic market. To achieve this target, the company has been continuously developing new products to maintain market leadership through design differentiation.
he global MP3 player markets are likely to see the formation of rankings among the suppliers,said Kim Dongwhan, chief of the strategic planning team at iRiver. he growth of brand power will be the deciding factor for survival in the fierce competition. To gain a competitive edge, quality is very important and so is the design.
In 2003, iRiver achieved $195.7 million in sales. This year the sales target was increased to $374 million. So far this year, the company has sold about 100,000 MP3 players a month. In the first half, the company sold three times as many MP3 players as Samsung Electronics, supplying about 600,000 players and achieving 50 percent of this year's target. In developing product designs, the company focuses on user sensibilities. With the concept, the company launched 13 new products under the "iRiver Spring Roadmap" this year. In particular, the company recently launched the new "N10." In the second half, the company plans to launch necklacetype all-in-one MP3 players. In addition, a new breed of motion picture-playing MP3 players will be introduced soon. The company also has a plan to extend OS options to Linux and Microsoft's Portable Media Center (PMC). R&D investment is focused on the improvement of audio quality, output and battery performance.
The company is competing with multinational global giants such as Apple, Sony and RCA to strengthen its brand power. The company has the third largest market share following Apple and Sony in the U.S. market, and the second largest following Apple in the Japanese market. Out of total sales revenue, 40 percent comes from domestic market, 30 percent from the U.S. market and the rest from Japan and other Asian countries. At present, overseas marketing is focused on the Chinese and European markets.
Based on images of masterpieces, the company plans to continue differentiating its MP3 players by offering high-end products with about 20 percent higher prices and elegant and fashionable designs. An all-out effort will be poured into global marketing to strengthen the brand's power by participating in overseas fashion shows.
