Monday, January 19, 2015

South Korea: "the world's most advanced mobile economy"

A new report by the Boston Consulting Group confirms and quantifies what those of us living in South Korea have known for a long time.  This nation is the world's most advanced mobile economy. The report singles out three countries that are reaping the greatest rewards from the mobile economy:  South Korea, the U.S. and China.  It notes that "South Korea has quickly become the world’s most advanced mobile economy, having embraced 3G and 4G since their onset. Mobile represents 11 percent of the country’s GDP, valued at $143 billion. South Korea is a leading actor across all phases of the mobile value chain, particularly in its high-value segments such as design and production of devices and components. A strong focus on R&D and bold investments in nascent technologies, such as semiconductors in the 1980s and Code Division Multiple Access (CDMA) two decades later, helped South Korean players take the lead in design and manufacturing operations."
As shown in Exhibit 4 from the report (click to see a full size version of the graphic), the six countries analyzed have a combined mobile GDP (mGDP) of more than $1.2 trillion and those same countries account for 47 percent of global GDP.  In Korea, the mGDP accounts for 11 percent of the national GDP.  Also, as noted in the report and shown clearly in the graphic (light green shading on the bar for Korea) "For nations with high production relative to domestic consumption, such as South Korea, exports are a major, if not the main, driver of mGDP. Countries with the strongest mGDP also tend to have unique capabilities within the highest-value portions of the mobile industry—intellectual property (IP) innovators, device manufacturers, and component designers—enabling high net exports. South Korea’s high mGDP, for example, is due to its major role in producing and exporting essential mobile products and components."
There is much more in this report and I recommend it to you.

Sunday, January 18, 2015

De-centralized manufacturing and smart factories in Korea

According to Business Korea, the Ministry of Trade Industry and Energy has announced plans to increase the number of smart factories in Korea to 1,000 this year.  The article noted that "On Jan. 15, the ministry announced at its annual report to the President that it will build 700 smart factories this year, and increase the number to 4,000 by 2017 and 10,000 by 2020. The purpose of the project is to further sharpen the competitive edge of the manufacturing sector by means of information technology, Internet of Things (IoT), and artificial intelligence. Test beds will be set up and key technologies such as 3D printing will be developed to this end.The ministry picked 10 main fields for the utilization of 3D printing, including dental medical equipment, smart molding, personalized articles, 3D electronic components, transport machinery parts, power generation components, 3D design services, and 3D content distribution services. Base technologies will be developed by 2017 before commercialization by 2020 and the development of advanced techniques starting from 2021. It is going to work on 15 strategic 3D technologies in the equipment, material, and software sectors, too."
The question in my mind after reading this report is whether the Ministry's plan adequately takes account of the sweeping effects that 3-D printing and the decentralization of manufacturing will have, in Korea and globally.   I'm reading Jeremy Rifkin's new book The Zero Marginal Cost Society, which offers a broad and interesting perspective on this question.

Wednesday, January 7, 2015

Innovation in storage: Samsung's T1 SSD

The semiconductor industry continues to be a driving force in the digital network revolution. Semiconductors serve several important purposes.  As semiconductors become smaller, lighter, cheaper and more powerful, they increase the computational power of all sorts of computers (a.k.a. smart devices). Also, thanks to the convergence of computing and telecommunications, they increase the capability to transmit digital information.  Finally, they increase the capacity to store information.
At this month's Consumer Electronics Show 2015,  Samsung's new T1 solid state drive (click on the accompanying graphic for a full size version) was selected as the most innovative semiconductor product.  As reported in The Korea Joongang Daily, it can store up to a terabyte of content and weights only about an ounce (30 grams).

Monday, January 5, 2015

Digital developments in 2015: the next revolution in mobile?

An article in the Korea Joongang Daily today prompts this post, which seems appropriate as an opening one for this blog in 2015.  Entitled, "In 2015 phone makers banking on innovation," the article comments on three new smartphones that are soon to enter the global market.  They include Samsung's new Tizen phone, Google's modular phone called Project Ara, and a Russian phone called the YotaPhone.
The Samsung Tizen phone, to be released in India, appears to reflect that company's belief that it must introduce a new operating system (OS) in order to compete successfully in the global marketplace.   Underscoring this, The Korea Joongang Daily article quotes a Samsung Electronics spokesman as saying that “Tizen is not only for smartphones but is a platform prepared for the Internet of Things era. It is essential to secure a platform to survive in an era when smartphones, wearable devices and home electronics are interconnected.”  I would argue, to the contrary, that Samsung and the other major Korean electronics companies, should place their emphasis on the development of software applications and content for the existing Android and Apple operating systems.  This, after all, is where the largest portion of money in the ICT sector will be spent.
Also, as noted in a post last spring, I believe that Google's project Ara in all likelihood represents the next big disruption in the mobile ecosystem, with repercussions around the world that might be even larger than the introduction of the iPhone in 2007.   If, after reading this far, you doubt this, I urge you to view the following video describing the new Project Ara phone.  Enjoy and think about what this means for the future!

Wednesday, December 31, 2014

China a bigger threat to Korea's ICT industries than Japan

Koreans have a proverb that says, "when whales fight the shrimp's back gets broken."  Of course, it refers to the location of the Korean peninsula, sandwiched between two larger countries and economies.
At least in the ICT sector, the Japanese "whale" has become much less of a threat to Korea, as pointed out in a post on the Barron's Asia blog entitled "In technology, China is a bigger threat to Korea than Japan is."  The post draws heavily on the analysis of Nomura Securities strategist Michael Na, who notes "We think the level of Korean tech players’ direct competition vs Japanese players has declined significantly, as opposed to in the past. This is mainly because many Japanese tech companies have exited from those IT products (ie, TV/display, smartphones, DRAM) in which Korean players have a competitive edge, or have seen their market positions deteriorate substantially. The market circumstances have changed such that Japanese players now primarily supply IT components, materials, and equipment to Korean tech players." Furthermore, Na observes that "We see a much higher degree of direct competition between Korean and Chinese companies. Chinese tech firms have already experienced significant growth, especially in set products (ie, TV, smartphones), by taking advantage of: 1) large-scale domestic demand in China; and 2) the fact that Chinese players are not regulated for IP (intellectual patent) issues."
In this situation, Korea finds itself struggling to "inch up the value chain," as the Barron's post puts it. Put otherwise, the big hurdle or challenge facing Korea is to shift its emphasis away from hardware manufacturing and exports and toward software, content and services.  This challenge is also at the heart of the creative economy initiative in Korea and involves the shift from a domestic to a global mindset.  I'm thinking that we'll see interesting progress toward meeting this challenge in 2015!