Assembly Speaker Urges Creation of IT Control Tower

As reported in The Korea Times, the Speaker of the National Assembly, Kim Hyong-o has reiterated the need to set up a control tower for information and technology policies.  "Korea needs a control tower that can oversee and lead the entire IT industry," he said in a radio program.  He contended that the IT industry has been treated as a byproduct of other industries, following the disbandment of the Ministry of Information and Communication in early 2008.  "We are facing a revolutionary moment, with the advent of smartphones, including the iPhone," he said. "We must quickly realize our failure to respond to the rapid evolution of the IT industry."
In February 2008, shortly after taking office, the Lee Myung-bak administration divided MOIC into the Korea Communications Commission; the Ministry of Knowledge Economy; the Ministry of Culture, Sports and Tourism; and the Ministry of Public Administration and Security. Certain functions of the information ministry were also taken over by the Ministry of Education, Science and Technology.

Korea's IT Trade Surplus Reaches New Record

As reported in the Joongang Daily, a new report by the Knowledge Economy Ministry shows that South Korea's IT trade surplus has reached record levels.  In April, Korea posted a record trade surplus of $6.71 billion in the information technology (IT) product sector, led by increased demand for semiconductors and display panels.  IT exports surged to $12.67 billion last month, the eleventh consecutive month the surplus has exceeded $10 billion.  Exports of mobile phones fell 28.2 percent to $1.75 billion, mainly due to increased overseas production by local companies as part of cost-cutting efforts.   Also, as mentioned in the last post, the popularity of the iPhone was an overall factor affecting the market for mobile handsets. (Click on the graphic to see a full size version.)

Smartphones lead hike in high-end Imports

A short, but very interesting article in this morning's Joongang Daily is titled, "Smartphones lead hike in high-end imports."  According to the Korea Customs Service, imports of mobile phones surged by 149 percent last year to $137.04 million, largely due to smartphones.  The Apple iPhone, released in Korea late last year, was responsible for most of this effect, as 72 percent of the mobile phone imports occurred in the fourth quarter of last year.  Moreover, imports of mobile phones rose by another 369 percent in the first quarter of this year from the same period a year ago.
Growth in other high-end imports is shown in the accompanying graphic (click to see a full size version of the graphic).

Yet More on the "iPhone Effect" in Korea's Telecoms Market

One part of the "iPhone Effect" or the "iPhone Shock" to the Korean market is becoming clearer.  An article in today's Chosun Ilbo is headlined "The iPhone Casts Clouds for Korean Handset Makers."  The article notes that Korea's mobile phone exports for the first quarter of 2010 were down 11.4 percent compared to a year ago, mainly because Samsung and LG are unable to compete strongly in the surging "smartphone" segment, led by Apple's iPhone and the Google-based Android phones.

This is just another strong piece of evidence that Korea's leading handset manufacturers and exporters bear a big part of the responsibility for the two and a half year delay in bringing the iPhone to Korea.  

The "iPhoning" of Korea

Jasper Kim had an excellent short article in the Wall Street Journal a few days ago, entitled "The iPhoning of Korea."   It reiterates a number of points made in earlier posts here, and adds a new one.  According to the article, mobile service providers balked at providing free WiFi service for the iPhone, something that had become commonplace elsewhere in the world.  Eventually, as we all know, KT provided free WiFi service to iPhone owners through its nationwide Nespot network.  I'd be pleased if any readers can elaborate on this point.  Did the issue of free WiFi further delay the iPhone's entry into the Korean market, after WIPI issue was taken care of?

Samsung and Apple's iPhone

In an earlier post, I posed the following question for readers of this blog.  How could South Korea, while possessing arguably the most advanced and dense digital networks of any nation in the world, be a laggard (80 or so other nations preceded it) in the adoption of the Apple iPhone and even Android-based "smart phones"?   Based on a recent article in the Korea Times, I am now tempted to propose a one word answer that explains the single biggest reason for the delay:  Samsung.   According to the article, KT's introduction of the iPhone in Korea created a rift between Samsung and KT, which continues to this day. Among other key points are the following:

• The immense buzz generated by the iPhone contrasted starkly with the paucity of excitement about Samsung's Omnia II, which had previously been proclaimed as an "iPhone killer."
• The iPhone has been selling about 4,000 units per day and its sales exceed those of Samsung's Omnia II by a considerable margin.
• According to the report, Samsung has been channeling most of its new mobile phones toward SK Telecom, while providing lax technology support on the phones it offers to KT.  In particular, Samsung is directing its smartphone pipeline to SK Telecom, including its new Galaxy series which run on the Android platform.
• The iPhone's rise is an alarming development for Samsung because it poses the question of whether the company can adapt to a new mobile marketplace in which the focus is moving from hardware to software and services.

Image of Korea's Technology Level Trails Germany, Japan, U.S.

An interesting article in the Joongang Daily reports that the image of the technology level of Korean products trails that of Germany, the U.S. and Japan.  (click on the graphic at left to see a larger version) As readers will know from previous posts, I have a longstanding interest in the problem of national images--how they are formed, how they change and the influence they have upon foreign policy, to name just a few aspects of my interest.
Today's article is based on a 2009 report by the Korea Trade-Investment Promotion Agency.  It notes that if products of such advanced countries as the U.S., Japan and Germany are valued at $100 on average, South Korean products of the same quality are valued at $71.50.  The article notes that, although there has been an improvement in Korea's image over the past several years, the "Korea discount" is still there.  In other words, tension between South Korea and North Korea is still a major downside to consumer perceptions.  According to a KOTRA official, "In the survey, students and the general public outside the corporate realm linked South Korea more with the Korean War and North Korea's alleged nuclear weapons program than with technologies and economic development."  Finally, one in four people surveyed by KOTRA thought that Samsung was a Japanese brand.

Korea Still has World's Fastest Average Internet Speed

The latest report from Akamai, based on data for the fourth quarter of 2009, shows that South Korea still has, on average, the world's fastest internet connections.  This was the subject of an earlier post, based on data from the third quarter of last year.  Those who are interested in changes from quarter to quarter can read the report but the overall picture remains largely the same.  On a personal note, I continue to enjoy fast internet access, both at my desk and while on the move via my iPhone.

Korea Ranks 5th in Google Censorship Requests

As reported widely in the international media, including the Chosun Ilbo, Google has launched a service that tracks government censorship requests directed to Google and YouTube.  The service is called Google Government Requests and can be accessed here.  From July to December of last year, Korea asked the internet search firm to remove 64 items from its services, placing Korea fifth highest in number of requests among the countries measured.  Of the 64 requests by Korea, online advertisements accounted for the largest share with 38 cases, followed by web search results with 18 cases.  Of the Korean government's requests, Google considered 89.1 percent to be justifiable and deleted the materials partially or completely.

A Space-Themed Android Onslaught in Korea?

The forthcoming entry of large numbers of Android phones into South Korea's market is taking on a number of themes related to space.  An article in the Chosun Ilbo today speculates on why this is the case.  Samsung has chosen the name Galaxy for a smartphone to be released later this month.  Earlier this week, Pantech unveiled a smartphone called Sirius.  LG Electronics new smartphone slated for release next month is being developed under the name Eclipse.
The space theme is in line with the open nature of Google's Android project.  The name Android itself refers to robots that appear in science fiction stories and movies such as Star Wars.  Although the Chosun Ilbo story did not mention it, we might add the obvious fact that these new smart "phones" with their ability for mobile broadband access, locational services and more, are a key point of convergence and contact for entering cyberspace!

More on the iPhone Shock in Korea's Mobile Sector

Evidence of the shock that the arrival of Apple's iPhone provided to the mobile communications market in Korea continues to accumulate.  As an article in The Korea Times today puts the question, it is "Can Samsung, LG Claw Way Out of iPhone Hole?"   (click on the graphic at left to see a full-size version) Of course, it is not only the iPhone hole, but in a real sense the Android one as well.  The major players in the mobile communications sector here, including service providers, handset manufacturers and the government, somehow managed to delay the arrival of the iPhone and Android phones in this market by approximately two and a half years.   As suggested in many prior posts on this blog, that delay arguably increased the system-wide shock to Korea's domestic mobile market.   Consumers had become accustomed to feature phones and to a heavy reliance on Korean-language only services.  Handsets like the iPhone and Android-based phones, because they bring the internet and location-based services to the palm of your hand, open up a whole new world of possibilities compared with the older feature-phones.  In the long run, this will be good for the Korean market and especially for consumers here.  In the short run it provides a shock!