Posdata, a Korean SI service provider which has been focusing on WiBro is suffering a huge loss due to WiBro.
As an affiliate of Posco, Posdata has established a healthy business, but now is faced with a spiraling loss despite growing revenue. The Q2 revenue of Posdata was 100 billion won ($100 million), up 31% year on year, but the operating loss surged 445% to 2.7 billion won ($ 2.7 million) during the same period.
The heavy loss is attributed to the WiBro business that the company launched in 2004. The company explains the loss expanded with inventory valuation loss on WiBro products and R&D costs newly appearing on the accounts.
In the WiBro market not as mature as the company has expected, Posdata is hardly achieving sufficient revenue. It is working hard in overseas markets, but earnings are not high enough to cover the expenses for winning orders, which is aggravating the losses.
The case of Posdata reminds us of Reigncom which has tried to switch its business focus from MP3 players to WiBro at the very beginning of the WiBro market. The manufacturer of renowned Iriver came up with an ambitious plan only to withdraw soon from the new market with bitter hurt.
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