VK Mobile Eats Dust, Pantech, Helio Next?

3 Comments

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!

3 Comments

Tai

I think that another article I read sums it up the best… If you’re a new company, trying to target a particular market, whether it be a youth market or not, you have to make it as appealing as possible. Think about it, you’re not just after new subscribers, you’re asking for people who already have a plan to pay an early termination fee and migrate to your service. Had they come out with a $40, or $50 plan with a standard 500 a/t mintues, free n/w, and they’re unlimited internet access, then people would have definitely been more enticed by this brand new company. The phones are already cool. I think the execs got it all wrong.

Jesse Kopelman

Actually Matt, youth want expensive phones and plans — it’s just a matter of getting mommy and daddy to pay . . .

Matt Maier

MVNOs are undoubtedly an ugly business for everyone but the landlods (i.e., Sprint, VZ Wireless), but there are scores of contract manufacturers for Helio to choose from, so it’s hard to imagine the loss of VK being a serious blow to Helio’s chances. What’s for more problematic is Helio’s muddled marketing message and high costs. What they’ve yet to figure out is who, exactly, their target customer is. If it’s the youth market, why the high data costs and expensive phones? You get the picture…

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