Rival Manufacturers Chasing the iPhone

While Americans have been blitzed with news about the iPhone’s debut, many in South Korea’s and Japan’s technology industries initially greeted Apple’s flashy new handset with yawns.

Cellphones in these technology-saturated countries can already play digital songs and video games and receive satellite television. But now that analysts and industry executives are getting their first good look at the iPhone, many here are concerned that Asian manufacturers may have underestimated the Apple threat.

In South Korea, manufacturers are taking the threat seriously, and are rushing out their own iPhone-like handsets. By the end of the year, Samsung, South Korea’s biggest cellphone maker, will unveil its Ultra Smart F700, with a large touch-controlled screen displaying rows of icons, much as the iPhone does.

But even if iPhone’s success is limited to America, it could be a setback for South Korean electronics companies, which export heavily to the United States. In particular, say analysts, Apple could end up seizing much of the top end of the American cellphone market, where a handset that cost $100 or more offers the highest profit margins.

That segment of the American market represents about a quarter of America’s 250 million cellphone subscribers, according to Strategy Analytics, a market research firm based in Newton, Mass. In contrast with cellphone users in Asia, more than half of American subscribers paid $50 or less for their cellphones.

Apple, whose biggest challenge may be persuading Americans to spend $500 or $600 for an iPhone, has said it wants to have the devices in the hands of 1 percent of the world’s cellphone users, or about 10 million people, by the end of next year.

For its part, Samsung says it is ready for Apple’s challenge, offering a far broader range of high-end products. Some of Samsung’s recent products in this segment in the United States include the BlackJack, a $200 smartphone that uses Windows Mobile, and the UpStage, a phone on one side and an MP3 player on the other.

Samsung employees insist, and analysts agree, that Samsung handsets offer better durability and higher performance than the iPhone. But if the iPhone succeeds, the lesson will be that engineering alone is not enough to win consumers, say analysts and others in the industry.