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Hidden Champions

Point Mobile logo
Point Mobile Industrial devices

Point Mobile is South Korea’s largest manufacturer of enterprise handheld devices with more than 30% market share. Its mobile computers, mobile POS devices, rugged smartphones and handheld terminals are used in retail, logistics, manufacturing, energy, healthcare and other various industries. Point Mobile has 196 sales partners in 79 countries worldwide with Amazon, Honeywell, Datalogic, Toshiba and Casio as major clients.

Published: Sep 14, 2021 (Gmt+09:00)

Last updated: Sep 29, 2021 (Gmt+09:00)

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Smart beyond Rugged: Digitizing Workflow for Global Enterprises

Amazon-backed handheld device maker eyes global top three spot

When Kang Sam-Kwon established Point Mobile, an enterprise handheld device maker in 2006, the timing could not have been better. Advances in wireless technologies were pushing South Korean retail and logistics firms to adopt more enterprise mobile devices such as industrial personal digital assistants (PDAs) in their daily operations. CEO Kang, full of entrepreneurial dreams, kicked off the new venture with five other professionals who had devoted their careers to the research and development of industrial PDAs.

While the timing was right, the quality of Point Mobile’s first product was significantly behind those of the leading global manufacturers such as Zebra Technologies and Honeywell. The company’s product design skills and technical expertise lagged far behind its competitors. Following some serious complaints from its first major client, Point Mobile destroyed every unit of its first model in stock. The company immediately faced serious financial challenges.

Kang turned to his business networks to pull himself and his company out of this early crisis through external funding. But helping hands were harder to find than expected. Contacting potential investors day in and day out proved largely fruitless.

The founder then began to look outside Korea. Kang recalled a client from Latvia that he knew early on in his career. The Latvian entrepreneur was the owner of the largest point of sale (POS) management system provider in the Baltic country.

“I remembered that the entrepreneur also ran a number of stores that distributed PDAs made by the global market leader, Zebra Technologies,” said the Point Mobile CEO.

After reviewing Kang’s proposal to jointly develop a next-generation industrial PDA, the entrepreneur agreed to invest $270,000 in the project. In return, the Latvian businessman acquired the sole right to sell the product in the European market. That was how PM350 was born, the second handheld device made by Point Mobile and its first steady seller – putting the business back on track.

Substantial growth took off in 2009 when Point Mobile entered into a sales partnership with Honeywell. After a series of meetings with Honeywell representatives at Taiwan’s Computex conference, Point Mobile successfully began supplying its devices to the US company as an original equipment manufacturer (OEM).

“As we had to work hard to meet Honeywell’s stringent quality controls, we naturally made a big step forward in our technological expertise. Our successful track record as an OEM to Honeywell helped us win trust from other clients when we later launched the devices under our own brand name,” reflected Kang.

Contents

  • [Product & Value Proposition] Exports Make Up 90% of Revenue with Amazon as Key Client
    Firms across different sectors use industrial PDAs for scanning products with barcodes or other identification codes such as radio frequency identification (RFID) tags. The device users can scan the items to identify product specifications and create relevant data for business purposes.

    The PDAs also collect customer payment data and transmit them to the company database using wireless networks. The companies then assess the payment data to analyze buying patterns for more efficient customer management.

    Point Mobile’s range of industrial PDAs can be largely categorized into personal data terminals (PDTs) used for warehouse and logistics management and enterprise digital assistants (EDAs) used for retail store management as well as transportation and delivery.

    Point Mobile's products are also used in the healthcare sector.

    Point Mobile says that durability is the most critical criterion of PDTs and EDAs. PDTs, also known as rugged handheld terminals, must scan the barcodes thousands of times a day at the warehouses or distribution centers. PDTs must be physically well protected to avoid any potential damage from external shock such as being dropped on the hard ground. Likewise, EDAs, which are smartphone-shaped, must be able to fully transmit sales data under any extreme conditions using the mobile network.

    Clients note that the company’s range of products adeptly addresses their primary requirements: design, portability, durability, ruggedness as well as prompt maintenance services.

    “Our industrial PDAs allow enterprise users to further install new functions according to their needs. The clients can also receive prompt technical support and maintenance services,” said the CEO.

    Point Mobile CEO Kang Sam-Kwon.

    After building a successful track record as an OEM and ODM supplier to the world’s leading firms, Point Mobile launched its own brand of devices in 2013. The company supplies its products to OEM/ODM companies, sales distributors as well as major market players including Honeywell, Italy’s Datalogic, Sweden’s Handheld Group and Japan’s Casio.  

    Analysts also note that 88% of the company’s 62 billion won ($54 million) revenue in 2019 came from overseas, thanks to its continued efforts in building a strong international network of retail and distribution companies over the years.

    In the global market, a major turning point for Point Mobile was its $200 million product sales contract with US retail giant Amazon in 2020. Under the deal, Point Mobile will be supplying its products to Amazon over an eight-year period, which replaces its existing PDAs used at its fulfillment and distribution centers every three years. Point Mobile says it expects exponential sales growth from Amazon’s announced plan to build more logistics centers all around the world.

    “Amazon chose Point Mobile over US-based industrial PDA makers for our technical expertise and superior product quality. We will be able to dramatically ramp up sales with our strong business ties with Amazon as a momentum,” added Kang.

    Moreover, Point Mobile also signed an exclusive sales contract with Europe’s biggest supermarket chain and the world’s eighth-largest retail industry player, Aldi. Point Mobile will be supplying its PM90 devices for use within Aldi supermarkets.

    The company is strengthening its foothold in the domestic turf at the same time. In April, Point Mobile signed a 4 billion won ($3.5 million) supply deal with the fermented drink maker, Hy Co., formerly known as Korea Yakult, and was also selected in July as Korea Post’s PDA supplier for its postal services. About 4,000 devices will be supplied to Korea Post.

    Category Product Detail
    PDT
    Rugged Handheld Terminals
    Overview Usage Main Functions
    Device used at warehouses and distribution centers; users can press the key buttons while holding products in the other hand. Mainly used by industries that use scanners, such as warehouse management, logistics and medical services sectors. 3G, 4G LTE, numeric & QWERTY keyboards, high durability (1.8m fall), long-range (10m) scanning.
    EDA
    Enterprise Mobile Computers
    Overview Usage Main Functions
    Smart, all-purpose mobile computer used for real-time checks on product information, price, specification, function, and inventory. Using mobile networks, it can also be used for probing and transmitting water or gas consumption data to a central server. A wide range of usage in the retail, public utilities (water, gas and power consumption), travel and accommodation, health, and fashion industries. 4G LTE, latest 2D scan engine, 5-inch display with near field communication (NFC) & magnetic stripe reader (MSR) functions, high durability (1.5m fall).
    EDA
    Rugged Enterprise Smartphones
    Overview Usage Main Functions
    Rugged smartphone with high level of software security and physical durability. To be used for maximizing production and work efficiency. Can withstand extreme environments for long periods. A truly wide range of usage from retail, on-site service, public utilities (water, gas and power consumption), travel & accommodation, health, to fashion. 4G LTE, fast-roaming Wi-Fi, Push-to-talk (PTT), 5-inch strengthened glass, high durability (1.2m and 1.5m falls).
    Accessories and Others
    Overview Usage Main Functions
    Single-finger Bluetooth barcode scanner to be used in connection with smartphones or PDAs. Logistics, sales management and other services. Bluetooth, GPS, NFC.
    Overview Usage Main Functions
    High-performance ultra-high frequency (900MHz) RIFD reader to be used with PM85. Stock management at warehouses, logistics and delivery management, retail store management. Can tag a large volume of products at the same time. Has a read range up to 6m and read time up to 700 tags per second. Can be connected to smartphones or use external networks, including Wi-Fi and Bluetooth.
  • [Market Position] Eyeing Place in Global Top Three
    The enterprise PDA market is growing at a sustained rate due to stronger demand for the devices from multiple industry sectors. According to the market research firm, VDC Research, the market will grow at an annual average rate of 5.3% from 2017 to 2022. Point Mobile added that improvements in the operating system (OS) and higher demand for work optimization should further fuel its growth.

    (Graphics by Jerry Lee)

    At the same time, the enterprise PDA market is known to have a high entry barrier and tough regulations regarding electromagnetic waves. Point Mobile notes that ceaseless R&D and business development efforts are necessary to promptly address both the market dynamics and specific client needs.

    According to Statistics Korea, a government agency, a total of six players are currently competing in the domestic enterprise PDA market, with Point Mobile as a dominant player with more than 30% market share.

    In the global arena, the company’s market share hovers around fifth and sixth place. The market leader Zebra Technologies holds 50.3% market share as of 2020, according to VDC Research, followed by Honeywell at 12.2%. The rest of the major players, including Point Mobile, hold less than 5% market share each.

    “With sustained sales growth in the global market, we are likely to take the third place after Zebra Technologies and Honeywell by the end of 2021,” said Point Mobile.

    (Graphics by Jerry Lee)

    Industry experts highlight that as Point Mobile’s products will be delivered to Amazon’s fulfillment and distribution centers in the US from the second half of 2021, the device maker’s revenue figures should continue to grow.

    The company also noted that its latest EDA model PM85 has been LTE-certified by America’s largest mobile carrier Verizon, a significant step in building a solid track record to bring in future global clients.

    (Graphics by Jerry Lee)
  • [Competitive Advantage] Durability to Withstand Extreme Conditions
    1. Product Development Know-how:
    As an OEM/ODM company, Point Mobile has been supplying its products to a long list of global firms such as Honeywell, Datalogic, Toshiba, Janam Technologies, Casio, Handheld Group and others. 

    “Japan’s Casio was especially stringent with hundreds of items on its checklist. They even checked for dust on the window frames at our offices. But we passed all their requirements,” said Point Mobile CEO.

    Industry insiders note that Point Mobile is especially known for developing products that fully address the individual needs of its clients. PM550 model supplied to Amazon is a good example. Point Mobile noted that PM550’s competing devices had an unbalanced center of mass, with one end of the device being heavier than the other. The lack of balance strained the wrists of the field users, who typically scanned products thousands of times a day.

    Meanwhile, Point Mobile revamped its model to place the center of mass as close to the middle as possible, by placing the batteries within the handle grip of the device. Another advantage of the device is that it does not immediately lose power when the battery runs out, not breaking the workflow.

    2. Price Competitiveness:

    Point Mobile established its Hong Kong office in 2014 to better address the diverse needs of the global clients. Dedicated manufacturing facilities were also set up in Shenzhen, China in 2015, with current production capacity at 198,000 units per year.

    Point Mobile added that having its own factory allowed it to surpass its competitors in terms of quality control and price competitiveness: Other industry players in Korea are making their products through third-party contracts. Another benefit of having its own production facilities is that the company can address customer requests and complaints more dynamically by controlling the entire supply chain from product design to actual manufacturing and after-sale service.  

    3. R&D and Quality Assurance:
    Point Mobile runs extremely strict quality-control tests to meet the high standards of its clients. The drop test is a representative example. The test runs a total of nine trials by dropping the device to a concrete floor from a height of 1.2-3.0 meters at different temperatures: three trials at -20°C, three at 22°C and three at 50°C. The products pass the test only when they prove to operate normally after completing all nine trials. Dustproof and waterproof tests are also conducted. The waterproof test is done by placing the device 1 meter underwater for 30 minutes and then testing its full operating function.

    Ceaseless R&D efforts have placed Point Mobile ahead of domestic rivals.

    “Thanks to our concentrated efforts to improve durability, the average defect rate of our products has been less than 1% since our company was established,” said Kang.

    Point Mobile also thoroughly manages the security of the software installed on its products. In 2018, it became the first company in Korea to receive Google’s Android Enterprise Recommended certification, meaning that its devices are safe from any data infringement.

    “We maintain the world-class product quality by spending more than 10% of our annual revenue on R&D, and by retaining about 50% of our employees as R&D professionals,” said the CEO. The company’s R&D expenditures in 2020 accounted for about 17.7% of its annual revenue.

    4. Strong Distribution Network:
    Point Mobile has 196 sales channels in 79 countries worldwide. It also participates in all the major industry conferences around the world with its own booths for brand awareness promotion, new product announcements and securing new clients.

    The company says that the proactive approach in engaging with existing and potential clients has allowed it to either set up business ties or discuss potential collaboration with virtually all the major global companies in the market. Such a strong network and brand awareness give it an edge over the competitors.
  • [Growth Potential] Expanding Product Lineup to Tablet PCs for Enterprise Users
    Point Mobile entered the mobile POS device market in April this year in partnership with system integration (SI) service provider Nawoo Technology & Service. The two companies will supply mobile POS devices to Hy Co. Point Mobile said that its Android-powered mobile POS device will allow Hy’s sales agents to handle customer payments more quickly on the spot.

    According to Point Mobile, the global mobile POS device market in size is forecast to jump from 31.4 trillion won ($27.1 billion) in 2020 to 43.3 trillion won ($37.4 billion) in 2022.

    (Graphics by Jerry Lee)

    Point Mobile’s next short-term goal by the second quarter of 2022 is to develop an enterprise tablet PC model to be supplied to its major client Amazon. The company says that Amazon’s annual demand for tablet PC will be about 100,000 units. Point Mobile is also developing surveillance cameras to be installed at a variety of Amazon stores. 

    Analysts say that another factor that may further drive Point Mobile’s revenue growth is Amazon’s recently revealed plan to open large-scale offline stores similar to department stores. The Wall Street Journal on Aug. 19 reported that Amazon will open offline stores akin to department stores in the states of California and Ohio.

    (Graphics by Jerry Lee)
  • [Valuation] Relatively Low Price-Earnings Ratio with Positive Growth Outlook
    Point Mobile is the first manufacturer of enterprise handheld devices to go public in South Korea. The company was listed on Kosdaq in December last year to raise funds for expanding its manufacturing facilities in Shenzhen, China.

    According to FnGuide, a market data provider, the handheld device maker’s annual operating profit this year is projected at 16.5 billion won ($14.2 million) on revenue of 96.9 billion won ($83.6 million). Its net profit in 2021 is estimated to stand at 15.3 billion won ($13.2 million), giving a price-earnings (PE) multiple of 21 based on its stock price as of Aug. 30, 2021.

    Major milestones in Point Mobile's corporate journey (Graphics by Jerry Lee).

    Point Mobile says its PE ratio is much lower than its global peers such as Zebra Technologies which stands at more than 30. Moreover, as the earning projections made by the domestic securities firms have not yet fully taken the Amazon-related sales into account, Point Mobile’s current valuation can be said to have more room for growth.
  • [Corporate Culture] Family-friendly Employer Giving Back 9% of Profit to Employees
    Point Mobile puts family values first and foremost. The company offers a home-like work environment by adopting a number of employee-friendly policies including flexible working hours, work-from-home options, as well as free meals throughout the day. In addition, the company’s in-house cafe employs two disabled baristas as part of its social responsibility initiative.

    The company also provides tuition for the offspring of the employees up to the university level, and gives out 9% of its net profit every year as employee bonuses. As a result, Point Mobile was certified by the South Korean government in December 2017 as “Best Family-Friendly Management Firm.”
  • [Corporate Governance] Positive Outlook with Amazon as Potential Major Shareholder
    Point Mobile’s largest shareholder as of the end of August 2021 is founder and CEO Kang Sam-Kwon, who has 23.22% of the total shares outstanding. The second-largest shareholder is financial investor Aju IB Investment with 13.75%, after selling 600,000 shares in a block deal in July.  

    Market analysts expect Amazon to take over as the second-largest shareholder once it exercises its preemptive rights to Point Mobile’s new shares, a condition that was agreed upon as part of their sales contract in 2020. Under the deal, Amazon can technically acquire up to 17.7% of Point Mobile’s shares at a predetermined price.

    Point Mobile CEO Kang Sam-Kwon.

    “We will continue to build a strong long-term relationship with our strategic investor Amazon,” said Point Mobile CEO Kang Sam-Kwon.

By Dong-hyun Kim; edited by Daniel Cho (3code@hankyung.com)