The Samsungs and the LGs of the world can breathe a bit easier now that VK Mobile, a second-tier South Korean mobile phone manufacturer, has dropped out of the race. While the big boys – Nokia, Motorola, et al – own most of the market share, small companies like Pantech and VK Mobile have historically been popular with MVNO carriers (the companies that piggyback on an existing network to sell branded telephone service), allowing them to create exclusive handsets without overtly covering the things with manufacturer logos.
But the news is the latest harsh blow for Helio, a teen/young adult MVNO that is capitalized by $440 million from SK Telecom and Earthlink. VK makes one of the company’s two commercially-available handset’s, the Kickflip, and VK’s downfall could bring Helio down with it. Helio’s other manufacturer Pantech, another second-tier Korean phone maker, could also be negatively effected by VK’s fall. If both of Helio’s launch partners go down, that could be the final nail in the company’s fast-closing coffin.
Gizmodo predicts that anyone who has signed up, or plans to sign up, for Helio should be on their toes for significant changes. A GigaOm reader says he bought a Kickflip and Helio never turned it on over the course of 2 months–he ended up returning it. Beyond Helio, MVNOs are on shaky ground right now, with only Virgin Mobile making a profit after seven years on the market. Many providers, including the ad-based Xero and EasyMobile are having a hard time grabbing subscribers even without Helio’s handset trouble.
Look forward to an update on Helio’s plans later this week!