September 20, 1996 in Social Responsibility News

First PCS Terminals Arrive in The US

. Samsung to supply 1.7 million PCS terminals to Sprint.
. Exports of the world's smallest wireless data communications terminal to be promoted.
. Samsung to invest US$ 950 million in new product development and overseas operations buildup over the next 5 years.

On September 20 Samsung Electronics Co. (SEC) announced that it had finalized an agreement to supply code division multiple access (CDMA) personal communications service (PCS) terminals to Sprint Spectrum L.P. of the US. The announcememt was made at PCS shows simultaneously held in Seoul and San Francisco. The 3-year contract calls for Samsung to supply 300,000 units in 1997, 1 million units in 1998 and 400,000 units in 1999, for a total of 1.7 million units worth about US$ 600 million. The agreed upon brand name will be Sprint-Samsung.

Samsung Electronics assigned 40 researchers and spent about US$ 6.2 million to develop the supersmall (54mm x 146mm), superslim (22mm thick) and superlight (210g) PCS terminal. It has the capability to access analog or digital systems (the same feature as current cellular phones) and can use the 1.9 G Hz radio frequency, which has been reserved in the US for personal communications services.

Bear Stearns & Corp. , the US consulting company specializing in telecommunications, expects a rapid surge in demand for PCS terminals in the US market. Their prediction is 2.5 million units of the next-generation device in 1997, 6 million units in 1998, 8.5 million units in 1999 and 10 million units in 2000 (a total of 27 million units).

Cellular Digital Packet Data (CDPD)
Meanwhile, Samsung Electronics is first in the world to develop the cellular digital packet data (CDPD) system, a wireless data communications terminal that supports the Internet. Samsung expects it can export large quantities of the CDPD terminals to the US (aiming at 42% of the population, or 150 million peoptle), Canada and Mexico.

Some 20 researchers at Samsung Information Systems America (SISA), located in San Jose CA, developed the CDPD terminal unit at a cost of US$ 7.5 million. It is 58 mm wide, 154 mm long, and 21.5 mm thick and weighs just 205 grams. It uses a large LCD panel and can send or receive 64 characters ( 16/line x 4 lines ) of data at one time. At the same time, it has all the functions of a regular cellular phone.

Roaming agreements have already been finalized in the major US geographical areas among AT&T Wireless, Ameritech, GTE Mobilnet, and BANM in order to expand services nationwide. By 1999, about 4.2 million people in the US are expected to be receiving CDPD wireless services. To secure a leading position in this high growth market, Samsung is building a new plant at Kumi, Korea to exclusively mass-produce CDPD hardware. Construction is scheduled for completion in November, allowing Samsung to start exports to the US.

Starting with the US, Samsung will aggressively go after the world market for CDPD terminals. Development of new models will be done in the US, the UK and Japan; offshore production facilities will be established in the UK, Mexico and China, and local sales networks will be opened in the US, Europe and Asia. This global system, to be built up over the next 5 years, will require an investment of US$ 950 million. By 2001, the company expects to have sold 30 million units, worth US$ 3.4 billion, making Samsung one of the world*s top 3 suppliers of CDPD terminals.

REFERENCE DATA:

SPRINT SPECTRUM L.P.
Sprint Spectrum L.P.: Sprint, the largest PCS provider in the US, formed a consortium with Comcast Corp., Cox Communication, Inc., Tele-Communications, Inc. (TCI) and Wirelessco L.P. in 1995 to take part in the bidding for rights to use the radio frequency designated for PCS. The consortium paid US$ 2.11 billion to obtain the licenrses to serve 29 major US cities, representing a potential market of 190 million people (or 80% of the US population). Commercial service is scheduled to start up at the end of 1996. Sprint employs about 2,000 people and has 33 offices around the US.

DEFINITION OF CELLULAR DIGITAL PACKET DATA
CDPD refers to a service for tranmitting non-audio data in packet units over a cellular network. Adding CDPD services to existing cellular networks allows users to receive large quantities of digital data via wireless terminals. This includes Internet access and the capability to send and receive E-mail messages, transmit files and run data searches on the Internet.

Principal Data Communications Functions:
E-MAIL : Simple E-mail messages can be prepared and sent or received through the use of a terminal only.
CDPD modem : Connect the terminal to a notebook PC, and wireless Internet access is possible via the Internet Web Browser inside the notebook PC.
Internet Web Browser : Even without linking up with a PC, the terminal can be used to search for information on the Internet by connecting with a server that supports Hand-held Device Markup Language (HDML).


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