Samsung Electronics Co said on Friday it has sold USD 400 million of mobile phone handsets to China Unicom Ltd in the South Korean company’s biggest telecoms deal in China. The world’s fastest growing mobile maker said the deal could lead to more orders in China, the biggest and fastest growing cellular market and one of the few bright spots for technology companies.

Insight

Samsung is well positioned for further growth this year. It is winning market share with its GSM products and is already a market leader in CDMA, the fastest growing 3G technology. China Unicom is finally gaining traction with its CDMA services and this could represent a massive opportunity for Samsung if Unicom exceeds its target of 4.7m users by year end.

Samsung looks poised to solidify its position as the world’s third largest manufacturer of handsets, barring an unexpected surge from SonyEricsson. Finances permitting, it would make enormous strategic sense for Samsung to acquire one of the smaller Western European manufacturers, such as SonyEricsson or Siemens. This would provide Samsung with additional distribution and expertise in GSM markets, which when combined with its CDMA leadership, would enable it to challenge Motorola for the position of Nokia’s closest competitor.