Thursday, September 30, 2010

Intel to Invest $20 million in Korean WiBRO Venture

As reported by Reuters and other media outlets, Intel will invest $20 million in a wireless broadband joint venture with Samsung Electronics, Korea Telecom, and Korea's National Pension Service.  The joint venture was announced last May by KT, with capital of $280.9 million.   It will expand South Korea's mobile WiMax coverage to 82 cities by March of next year, covering 85 percent of the nation's population.
The expansion is part of KT's effort to cope with surging data traffic following introduction of Apple's iPhone in late November of last year.

Tuesday, September 28, 2010

Google's Transparency Report and Government Requests From Korea

I noticed a bump up in traffic to this blog over the past few days and then found that R. Elgin had called this a "neat blog" in a post over at The Marmot's Hole.   Thank you for that!   In the same post he noted a Joongang Ilbo report about the Korean government's requests for information from Google.  I'd seen the same article and this prompted me to look more closely at Google's transparency report.
During the first half of 2010, according to Google's data, the Korean government requested the removal of web content 38 times, involving a total of 8,549 items.  The Google report indicates that 100 percent of the removal requests were "fully or partially complied with."  As reported in The Korea Times, the number of removal requests was the largest in Asia and the sixth highest worldwide.
Why so many removal requests from the Korean government?  The vast majority of such requests, according to Google Korea, are for removal of URLs that contain personal information in the form of Korean resident registration numbers (RRNs), which contain date of birth, gender, registration region, and registration order.
The Korea Times article also noted that Google's transparency report did not disclose similar data for China because, according to Google "Chinese officials consider censorship demands to be state secrets, so we cannot disclose that information at this time."  

Monday, September 27, 2010

The Rapid Diffusion of Smartphones in Korea

The Joongang Daily carried two articles today that underscore important aspects of the transformation taking place in mobile communication, here in Korea as well as globally.  The first article noted that the recent Chuseok holiday led to a surge in the downloading of smartphone applications. Applications for road navigation, expressway traffic congestion and charye, the Korean ancestor veneration ritual, topped the popular application list during the holiday period. The same article noted that smartphone users in Korea currently number three million, a figure that is expected to double by year's end. I expect that may be a conservative estimate. Just think of how many family members and relatives had a chance to see the iPhone or Android phones in operation over the Chuseok holiday! That sort of exposure probably represents the most powerful form of sales promotion for these devices here in Korea.
A second article described the parts bottleneck that is being faced by the manufacturers of smart phones. As shown in the accompanying graphic (click to see a larger version), industry forecasts in the spring of 2009 significantly underestimated the worldwide growth of demand for smart phones.  Consequently, such parts as the organic light emitting diode (OLED) screens are in short supply.  The manufacturing process for such parts bears many similarities to that for semiconductors and requires long lead times to build fabs and ensure adequate capacity.

Thursday, September 23, 2010

Korea's Mobile Broadband Revolution: Some Market Projections

Pyramid Research recently came out with a report that includes projections for South Korea's communications market revenue through 2015.   The accompanying bar chart (click on the graphic to see a larger version) summarizes their projections.  Not surprisingly, fixed voice service is projected to decrease, while fixed VOIP (Voice over Internet Protocol, as in Skype) is projected to increase significantly by 2015.  Mobile data, the green portion of each bar, is projected to show the greatest increase through 2015.  This segment of the market essentially refers to mobile use of the internet via Apple's iPhone, Android handsets and other devices.  Of course, it include mobile use of Skype, which should come naturally to those who already use it as a fixed VOIP service on their computers at the office, in the home or elsewhere.
The main trend represented in the graphic included here is that broadband internet is going mobile!  I would be surprised if mobile data services don't grow even more than Pyramid predicts.

Sunday, September 19, 2010

Net Neutrality: The View From Korea

More than two years ago I wrote a post for this blog on the topic of "Net Neutrality and Conceptions of Cyberspace."  You'll forgive me for not following all of the twists and turns of that debate in the United States, including failed efforts by the F.C.C., court rulings and the joint statement on net neutrality by Google and Verizon.  You see, living in Seoul, one might as well be on another planet when it comes to debating net neutrality.  Consider the following:
  1. As I noted in my earlier post, something approximating net neutrality was part of South Korea's efforts to build a modern telephone network, starting in 1980.  The experience here with a massive telephone service backlog and the social divisions it exacerbated made the goal of universal, equal service for all Korean citizens a non-debatable issue.   From the beginning, Korea set out to build an "information welfare society" (정보복지사회) in which services and the tolls charged for them would be the same for residents of farming and fishing villages as for the residents of Seoul.
  2. Korea never let up on its commitment to building and improving network infrastructure.  When U.S. Vice President Al Gore spoke about the importance of "information superhighways" in a 1994 speech at UCLA, the Korean government picked up on that terminology and implemented the Korea Information Infrastructure project in 1995, which gave it some of the world's most advanced fixed broadband networks in the world within a decade.  Also in the 1990s Korea became the first nation in the world to commercialize CDMA for mobile telephony, giving consumers here the potential to access broadband internet while on the move.
  3. As readers of this blog will know, actual use of mobile data services in South Korea remained very low (around 10 percent of mobile phone subscribers) until the arrival of Apple's iPhone in late 2009 and the shock it created.  Unlike the U.S. where AT&T's networks at first could not handle the data traffic generated by iPhone users, Korea had mobile networks in place with plenty of excess capacity and the big debate here in 2008 and 2009 was about how to increase consumer's use of mobile broadband services!
  4. Korean citizens today not only enjoy uniform rates for roughly equivalent services nationwide, but they also have developed some of the world’s highest standards for service. Most installation of telephone, broadband internet or other communication service is done on a same day basis.If problems arise with consumer electronics products, after-service (AS) is very efficient.  In response to high consumer expectations for after-service, Apple has had to revise and upgrade its AS policies here.
  5. In short, from the vantage point of someone living in South Korea, the net neutrality debate that is so heated these days in the United States seems misdirected.  If the U.S. had, like Korea, made a long term and consistent commitment to building information and communication infrastructure, along with citizen awareness of how to use these resources, the situation might be entirely different. Indeed, the general direction of ICT technology continues to be toward greater computing and communications capacity at lower costs. This basic trend, as expressed in Moore's Law, is at the heart of the information revolution. Consequently, the longer term prospect all over the world, is for an information culture in which information flows freely and abundantly, without restriction for lack of vision, commercial greed or whatever other reasons might be given.
I'd like to challenge readers to point out what, if anything, is wrong with this picture.   Enjoy.

Friday, September 17, 2010

Mobile Phone Subscribers Outnumber People in Korea

It finally happened.  The number of mobile phone subscribers in Korea now outnumbers the population.  This is a trend that arrived several years ago in some other countries which allowed a single individual to have multiple mobile subscriptions by swapping SIM cards.  As reported in the Chosun Ilbo, the number of subscribers to wireless communications services totaled 50.05 million as of September 8th, while the nation's population was estimated at 48.88 million.
With the arrival of smart phones, tablets and notebook PCs, the trend toward more than one mobile service is likely to continue.

Sunday, September 12, 2010

Digital Development in Korea: Building an Information Society

Now that Dr. Oh and I have delivered the manuscript of our new book to Routledge for production, I'm pleased to share some additional details.  As we explain in the book's Preface, this collaborative project came about because of our common interest in the role of ICT in South Korea's development over the past three decades.  Routledge has updated its web site with information about the book, including the following:
An Overall Description
Reviews (excerpt from Foreword )
Author's Biographical Notes
The book is on schedule to be published in February of next year.

iPhone 4 Arrives in Korea

As reported in the Joongang Daily and other papers, the arrival of the iPhone 4 in South Korea was greeted by long lines of customers.  (click on the photograph to see a larger version).  Although Samsung's Galaxy S and other smartphones are present in the Korean market, they still do not have the sheer number of applications that Apple's platform supports.  It seems likely that the iPhone will continue to drive the mobile revolution here, and worldwide, until Android phones catch up on the application side of things.
In an encouraging note, KT is taking the iPhone 4 introduction as an opportunity to promote its expanded services for expatriates in Korea. With the growing number of foreigners in the country, KT said it will provide special services for expats in Korea. The mobile carrier opened a twitter account ( that offers advice in English on the use of the iPhone 4 and KT’s other services. In addition to the permanent expat community in Korea, KT and the other mobile service providers should be explicitly targeting more of the marketing toward tourists and business visitors, who may want to use state-of-the-art mobile services during short stays here!

Thursday, September 9, 2010

Korea to Develop "Software Maestros"

In an effort to boost the nation’s lagging software industry, the Ministry of Knowledge Economy selected 100 young trainees to be part of its first “Software Maestro” nurturing program.The ministry’s move comes amid concerns that the country’s industrial focus has been on hardware industries such as semiconductors and liquid crystal displays at the expense of its software industry. In 2009, Korea’s market share of the global software market was just 1.8 percent, or $17.8 billion, according to recent government figures. The share of software exports was even lower, taking up only 0.8 percent of the total global pie.
Additional information on the new "World Best Software" Program are contained in an article in the Joongang Daily.

Wednesday, September 8, 2010

Korea's IT Exports Continue Their Year-on-Year Surge

The volume of Korea's information technology exports continued to increase, year-on-year, in August.   As reported by the Joongang Daily, exports last month were 26.4 percent higher than August of last year at $13.4 billion.
The increase was mainly due to exports of semiconductors and display panels. Shipments of semiconductors increased 64.9 percent to a record $4.7 billion, mainly led by the improved memory chip industry. Exports of display panels also jumped 25.4 percent to $3.2 billion as product demand was high, especially in China, Hong Kong and the European Union.
Meanwhile, the export of cell phones decreased 18.4 percent in August to $1.8 billion, due to a drop in export unit costs, increased overseas production and low demand for ordinary cell phones. Though smartphones are gaining popularity worldwide, local manufacturers started releasing devices relatively recently.
So, Korea remains an IT export powerhouse for the time being, but the decrease in mobile handset exports is clearly an important indicator of developments in the global marketplace and Korea's place in it.

Tuesday, September 7, 2010

North Korea's Software Industry

Although the digital divide between North and South Korea may be the largest in the world by many measures.  However, as with most generalizations, there are exceptions to the rule.  In the case of North Korea, one of these may be found, somewhat surprisingly, in the are of software and programming.  Bloomberg reports that programmers for North Korea's General Federation of Science and Technology developed a 2007 mobile phone bowling game based on the 1998 film "The Big Lebowski," starring Jeff Bridges, as well as "Men in Black: Alien Assault."
North Korea's growing software industry is championed by Kim Jong Il and contracting with North Korean companies is legal under United Nations sanctions unless they are linked to the arms trade.  Volker Eloesser, a founder of Pyongyang-based Nosotek, notes that the technological education of graduates from North Korean universities has become significantly better.  North Korea’s information technology push began in the 1980s as the government sought to bolster the faltering economy.
Today Nosotek advertises itself as "the first western IT venture in DPRK (North Korea).  Its web site expands upon this as follows:

  • In DPRK, software engineers are selected from the mathematics elite and learn programming from the ground-up, such as assembler to C#, but also Linux kernel and Visual Basic macros. 
  • Among them, Nosotek has attracted the cream of local talent as the only company in Pyongyang offering western working conditions and Internet access. 
  • In addition to the accessible skill level Nosotek was set-up in DPRK because IP secrecy and minimum employee churn rate are structurally guaranteed.< Nosotek sells direct access to its 50+ programmers jointly managed by western and local managers. 
  • Services can be invoiced through a Hong Kong or Chinese company. 
  • Benefit from North Korea's opening, outsource to Nosotek.
From the government's point of view, the activities of such companies as Nosotek is no doubt appreciated since they generate foreign exchange.  However, as noted by Andrei Lankov, a North Korean expert based in Seoul, "These activities help to fund the regime, but at the same time they bring knowledge of the outside world to people who could affect change."  The dilemma facing North Korea, a subject of earlier posts (and also this one), seems to be growing and not diminishing.

Thursday, September 2, 2010

Korea's Response to Google and Apple

To readers of this blog, please know that I'm still alive and well.  It is just that I've been a bit busy with other things at work and at home and have not been able to post much in the last several weeks.  However, I have been following the press and the trade publications that cover South Korea's IT sector and cannot help but comment on the overall response to the popularity, worldwide and in Korea, of products being sold by Google and Apple.
Today, for example, The Korea Times carried a report that LG was about to unveil the "1st Smart TV."  This would be a television set equipped with "Netcast 2.0" for web-connected televisions.  This move by LG was clearly a response to moves by Apple and Google, along with its Korean arch-rival Samsung.
The situation is somewhat similar with smart-phones and notepad sized devices.  Samsung and LG are scrambling to come out with their own devices that might compete with Apple's iPhone and Android-based digital devices.
What is the common denominator in all of the reports I'm reading? It is simply that South Korea is still heavily reliant on the manufacture of communications hardware, rather than content or software.  It is the latter that not only makes up the bulk of the global ICT market, but also represents the major hurdle for Korea to continue its remarkable advance as an "IT Powerhouse" or a knowledge economy.  The transition to greater emphasis on software and content in Korea has begun, but it will be a long-term challenge for the country to succeed.  This challenge will be the subject of future posts.