Can chip giant Qualcomm boost also-ran Pantech?

By Kim Yoo-chul

Pantech’s Vega LTE smartphone

Although Korea has emerged as a global leader in mobile phones, Pantech has permanently come in at third place behind local industry giants Samsung Electronics and LG Electronics.

This was not helped by its struggle to transition from feature phones to smartphones, an ineptitude that nearly cost the company its existence.

But despite years of business turbulence and frustrating anonymity, Pantech continues to claim it’s on course toward rebuilding and delivering on the promise it showed in the early-to-mid 2000s when it gave LG a run for its money.

Its driving force happens to be Qualcomm, the San Diego-based mobile technology giant.

On Tuesday, Pantech said in a regulatory filing that Qualcomm has decided to invest as much as $23 million in it to increase a stake in the Korean handset maker from 11.46 percent to 13.49 percent.

``Pantech will issue 52 million common stocks to Qualcomm. The price for the stock is 500 won or some 60 cents. Qualcomm expects to finish the money transfer by Feb. 7,’’ said a Pantech spokeswoman.

As the second-largest shareholder, Qualcomm has not been actively involved in Pantech’s decision-making process and this isn’t expected to change after it becomes the major shareholder.

``Eleven financial institutions, led by the Korea Development Bank (KDB), combine for a 46.98 percent share in the company. Qualcomm’s additional investment is great, but there won’t be much change on how the company is run,’’ said the Pantech official.

In 2011, Pantech posted 201 billion won in profit out of 3.01 trillion won annual revenue. Its business worsened in 2012.

``We are competing with LG Electronics for the second position in mobile phones in Korea. But Pantech is struggling to maximize its potential as a global brand. That’s why the Qualcomm investment is very good news for us in terms of technology advancement and credibility,’’ said another Pantech official.

Over the past couple of years, the Korean firm has launched a few affordable smartphones in the United States.

It will sell its latest Vega No. 6 smartphone in Korea from Feb. 28, equipped with a Qualcomm Snapdragon S4 Pro quad-core mobile processor and a high-definition 5.9-inch display.