Pantech is going to first focus on IoT (Internet of Things) business that can make profits right away and put aside Smartphone business temporarily. It is also going to reduce number of employees in order to improve cost breakdown structure.
“In order to improve cost breakdown structure, we are going to decrease number of employees to under 100.” said a high-ranking official for Pantech. “However we are not giving up on Smartphone business as it was reported through certain media.”
“Although it is difficult to explain detailed plans about possible release date of new Smartphones, we are going to look for new opportunities by constantly maintaining our after service (AS).”
Pantech is going to focus its capabilities in IoT in order to create a business structure with competitive edge. Its plan is to make profits from IoT field while reducing percentage of its Smartphone business. This indicates that it will focus on IoT business until profitability is improved.
Pantech is going to focus on developing M2M (Machine to Machine) modules. Pantech started BIS (Bus Information System) business by supplying PR-L300S, which is M2M device, to Gyeonggi Bus in December of 2013. Based on this experience, it is going to go after B2B (Business to Business) markets. Its goal is to successfully complete IoT projects with its partners and expand areas of its M2M module business.
“In order to create a business structure with competitive edge, we are planning to continue our Smartphone business in South-East Asian markets depending on agreements.” said a representative for Pantech. “Although we can get rid of some patents, this does not mean that we will get rid of our Smartphone business.”
Pantech had drawn every attention by releasing ‘Sky IM-100’, which cost about $356 (400,000 KRW), last year after 19 months since its previous product was released. Its goal was to ship out 300,000 IM-100s by end of 2016. Although it seemed like it was able to meet its goal by releasing 86,000 IM-100s in first month, sales of IM-100 had slowed down as Samsung Electronics and Apple released their new Smartphones one after the other. Eventually Pantech had to be satisfied with shipment of 130,000 IM-100s in 2016.
Although Pantech thought about going after Vietnamese markets in order to maximize profits, it had faced difficulties due to delay of negotiation. Negotiations were delayed as there were new requirements day by day. It made $62.8 million (70.6 billion KRW) in net loss last year which is bigger than its sales of $45.8 million (51.4 billion KRW).
Due to this, it was difficult not to reduce number of employees. Number of executives and employees of Pantech was about 500 when Solid purchased Pantech in November of 2015. However it was recently reduced to about 120 as layoff of employees has continued afterwards. It is likely that number of employees will be reduced two-digit number through this restructuring.
“Although reduction of number of employees will be inevitable, we are going to create a stable business structure by first focusing into fields with competitive edge.” said a representative for Pantech. “We are currently looking for ways to make profits from IoT fields while having many opportunities open.”
Staff Reporter Choi, Jaepil | firstname.lastname@example.org