The Smartphone Race a Hardware Battle? Samsung's Future

The Financial Times carried an interesting article today entitled "Samsung needs to hit reset button." .
It referred to the company's strength in hardware, notably memory chips, in which it invested  Won11,000bn last year.  Also, its bright and power-efficient Amoled (or active matrix organic light-emitting diode) mobile screens are increasingly the industry standard.
But the long term worry for Samsung is software, which is crucial to its increased focus on high-end consumer electronics such as smartphones and tablets. Falling prices for chips – which constituted about half of second-quarter operating profit – have pushed Samsung to prioritise its Galaxy devices, which are big challengers to Apple’s iPhone and iPad.
The article goes on to quote Chang Sea-jin, professor at Singapore National University who says Samsung was fortunate to produce such devices just as Google’s Android was becoming a standard operating system. He argues this reduced the smartphone race to a “hardware battle, where Samsung is strong”.
However, especially since Google's acquisition of Motorola, Korean government sources have expressed concerns about Samsung's weakness in software. Kim Young-Chan, an analyst at Shinhan Securities is quoted as saying that “Samsung cannot easily build up software in a short time and it is hard to expect major changes from Korean engineers with fixed ways of thinking,” said Mr Kim. “But Samsung will not be marginalised, given its strength in hardware.”

The Global Internet is Decentralizing: Where South Korea Fits

Telegeography has come out with a very interesting new report on Global Internet Geography that shows clearly how the global internet is decentralizing.   To see a full size version of the accompanying graphic, click on it. According to the report, .the global Internet is far less centered on the United States than it was 10 years ago. The development of rich regional networks, coupled with a need for diversification, has reduced the share of international capacity connected to the U.S. for all regions except Latin America.
The report also notes that the shifting topology of the global Internet is tied to the desire to locate content nearer to end users and, ultimately, reduce latency. Several carriers reported that improved routing efficiencies, largely attributable to the caching and localization of content, have reduced traffic on their interregional links and led to more rapid growth on local and regional links. (I have put "localization" in bold to emphasize it.).
The desire to locate content nearer to end users is something that will be apparent to any Korean internet user who has impatiently waited for web pages hosted on servers in the U.S. to respond.   The localization of content is a much more important matter, especially here in South Korea.   This nation, despite possessing the world's most extensive and advanced digital networks, stands out as only one of four countries in the world where Google does not yet have a respectable market share for web search.  See my post in late 2009, before the late arrival of Apple's iPhone here.  The internet in Korea, despite its dazzling networks, is still largely a walled garden ( if you doubt that, do a search of this blog for "walled-garden" to read some of my other posts.)  The vast majority of web surfing done by Koreans is done right here on within the southern half of the peninsula, using Naver, Daum and other popular Korean language sites.  This fact alone says volumes about the nature of the internet and the nature of Korea's information society.  I suspect that similar patterns elsewhere in the world account for the Telegeography findings.  What does all of this say about the role of language and culture in 21st century communications and the potential role of the internet in promoting global awareness?   While the younger generations here in Korea are beginning to search the worldwide web using Google, thanks to the arrival of smartphones in late 2009, these are questions that deserve to be examined in some detail.

Students are Developers at Korea's Game Science High School

Korea's system of specialized high schools includes one that focuses on game science.  It was the subject of a post here more than three years ago.  This morning The Joongang Daily carried an interesting article with some updated information on programs at the high school. (click on the photo at the left to see a full size version)
At Korea Game Science High School in Wanju, North Jeolla, students are getting a head start on becoming innovative leaders in the game industry.
Through a new school program, IT Industry Development Center for Adolescents, designed to promote entrepreneurship, students have founded 16 companies that have created numerous online and mobile games - some of which have become hits.
The program, the first of its kind in the nation, has instilled a sense of possibility and confidence in the students, many of whom say that they want to emulate, if not challenge, Steve Jobs.
Each company is comprised of three to four students - mainly juniors and seniors - and is provided with separate offices with Apple computers and faculty advisers.
IT companies have also chipped in to help, providing technical support and advice for the student entrepreneurs.
Students in the program develop games on the weekends and from 9 p.m. to midnight on weekdays. To help promote their products and their companies, the school program also organizes monthly conferences.
Recently, Choi Young-jae, 18, set up a company called L II with his classmates. Their mobile phone game, My Drawing Story, was released in July and has become a huge hit, downloaded more than 10,000 times in two weeks. The game, in which the player defeats monsters and goes on a journey by drawing shapes, has received the highest marks from reviewers for its exciting story line and abundant contents.

Korea's Hardware Success and Software Challenge

A great deal has been written over the years about the strength of Korea's IT manufacturing and export sector in comparison to its relative weakness in software and content industries. The Joongang Daily has a lengthy article on the topic today, with supporting data and an effort to explain why Korea remains relatively week in the software area.
According to the article, as Korean companies take a hard look at their software vulnerabilities, they say they see a vicious cycle at work.
First, students shun software-related majors at universities. The quality of Korean software manpower falls behind that of other advanced countries. Companies don’t pay and treat their software engineers right. And that goes back to students shunning software majors at universities.
The accompanying graphic shows average salaries by certain occupational groups (click on the graphic to see a full size version).
According to a recent report by the Samsung Economic Research Institute, the number of places in IT-related departments at about 100 major universities in Korea have been declining for four years straight since 2006.
Admission quotas, or places, in computer engineering departments plunged at the fastest rate. The figure stood at 80 in 2006, but decreased to 73 in 2009. That compares to the figure for electric and electronic engineering, which inched down from 87 in 2006 to 85 in 2009.
“As the IT environment undergoes rapid changes, it’s crucial for Korea to secure software capability fast,” the report pointed out. “But universities appear to have succeeded in neither attracting top-tier software talent nor providing high-quality education programs.”
“The morale of Korea’s software talent is at its lowest,” said Daniel Lee, 41, CEO of Inspirit, a local company that makes software for mobile communication networks. “The importance of software is growing day by day, but if things don’t change, Korea’s software industry has no future.”
Some cite an even broader problem in the Korean technology industry: An under-appreciation of the value of start-ups and their innovative ideas, except by foreign tech firms.

KT Stuck in 2G Mobile Service Conundrum?

The complex interplay between mobile service providers, Korea's telecommunications regulator and the handset and equipment manufacturers is the underlying theme of an interesting article in The Korea Times today.
KT, the country’s No. 2 mobile carrier, desperately needs to close its second-generation (2G) mobile service after dropping its bid for the 1.8 gigahertz (GHz) band in the government auction, otherwise it will lag behind competitors in adopting the ultra-fast 4G service. The regulator, however, isn’t approving KT’s move without proper guidelines.
As noted in an earlier post, KT dropped its bid for the 1.8 GHz band Monday, allowing competitor SK Telecom, the biggest player in the industry, to buy the band at 995 billion won, more than double the starting price.
“We sought approval from the Korea Communications Commission (KCC) for our plan to close the 2G service early August,” a KT representative said.
However, it remains to be seen whether the regulator will approve it. KT already sought approval a few months ago, but the KCC rejected it saying the carrier still has too many 2G users.
KT said it has greatly decreased the number of 2G users since then. It currently has 320,000 2G users, a steep decrease from 1.1 million in March when it first announced the plan to halt 2G service.
“The number is decreasing by thousands each day. We expect to get the green light this time,” the KT representative said. KT has been trying to lure 2G users to its 3G service, providing new handsets for free or offering subsidies and exempting subscription fees.
KT Chairman Lee Seok-chae held a press meeting, and announced that KT would halt the 2G service in September to launch LTE service in November. Lee’s remark is regarded as pressure on the KCC to allow it to halt 2G service.