Market Insight

Woojeon & Handan exits set-top box market

July 08, 2015

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South Korean mobile phone parts and set-top box (STB) vendor Woojeon & Handan has exited the STB market. Woojeon & Handan was formed in 2009 when mobile phone parts manufacturer Woojeon acquired Handan, for USD 7.4M. Woojeon will continue its mobile part business, but has spun-off its STB business and liabilities into a new company named Handan Broad Info Comms.

Our Analysis:

Woojeon & Handan’s decision to exit the set-top box market is a result of cumulative deficits incurred from its STB business, which has made losses in each quarter since 2012, with operating losses reaching USD 302.5M in 2014. Its STB revenues have fallen year-on-year since 2010 from USD 113 million to USD 9 million in 2014, equating to approximately 7% of its core mobile phone parts and moulds business.

Woojeon & Handan’s lack of success can be attributed to two factors : firstly its reliance on its deals with Indian satellite pay TV operator Dish TV which it lost to Arion in 2013; and secondly, its STB strategy remained very much focused on supplying commodity boxes to emerging markets, where margins are relatively slim and competition is fierce. Ultimately, Woojeon & Handan’s STB strategy resulted in a lack of scale, inhibiting innovation and the ability to diversify into compelling STB solutions which confined its growth. This predicament is not exclusive to Woojeon & Handan; fellow Korean STB vendor Hyundai Digital Technology (HDT) faces a similar situation, resulting from a similar strategy. HDT’s STB revenue has been in decline since 2007, with revenues dropping from USD 110 million to USD 5.6M in 2014. The lack of growth has led to HDT switching focus to its casino resort business line, with a name change to Majestar earlier in 2015. It intends to phase out its STB production entirely in the near future, but has not announced specific dates.

Woojeon & Handan’s exit and HDT’s plans present a reminder that further consolidation in the set-top box market is highly likely.


South Korea
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