Sales of Mobile Phones Sizzling

The Joongang Ilbo today notes that sales of mobile phones have been sizzling lately, largely due to a rise in consumer spending and increased sales of so-called smart phones.  According to the London-based research firm, Strategic Analytics, world mobile phone shipments stood at 324 million units in the fourth quarter of 2009, a ten percent increase over the same period in 2008.  As shown in the accompanying graphic, (click on graphic to see larger version) Nokia remains the market leader with a 38.1 percent share of the global market.  Samsung and LG together have a 30.6 percent share of the market, followed by Motorola with 4.9 percent and "other" manufacturers, including Apple with 20.1 percent.

A couple of things should be noted about these 2009 market share figures.  First, they represent the end of an old era in which feature phones dominated the mobile market.  Feature phones are those with certain features, such as the phones camera or music capability, are accented to appeal to different market segments.  The feature-phone era is ending and giving way to the new era of hand-held broadband internet computers, as discussed extensively in earlier posts on this blog.

Second, the figures and this graphic do not break out sales of either the Apple iPhone or Android devices.  These two categories promise to take up most of the global market share over the next five years or so.  It appears that the major challenge for LG, Samsung, Motorola and Symbian is to see how much of the Android market share they can occupy.

Third, mobile handsets are well on their way to becoming a commodity, just as happened with personal computers.  The key value in the global mobile market is in the software and applications.  What a person anywhere in the world can do with his or her mobile device will simply depend on the speed of the internet connection and the power of the Apple apps, Android apps, and ....we'll see what others might become competitive in the global market.

The Mobile Revolution: More on the iPhone Effect in Korea

As time passes, it becomes more and more apparent that the introduction of Apple's iPhone has sent shock waves through the mobile communications sector in South Korea, revealing some of its salient characteristics.  This phenomenon, the so-called "iPhone Effect" deserves a more thorough treatment than in my earlier post.  The following are some of my thoughts about the iPhone effect.

• The iPhone effect is occurring now only because leading industry and government players chose to ignore the implications of the transformation in mobile communications taking place around the world starting more than two and a half years ago with the introduction of the iPhone.  Neither the handset manufacturers, nor the mobile service providers, nor the government seemed very concerned about this until mid 2009.  The effect was that Korea continued to pursue an old model of mobile communication, based on feature-phones, while mobile broadband and "apps" were taking hold elsewhere in the world.


• It underscores Korea's relative weakness in the development of software and internet content, versus the manufacturing of hardware.  LG and Samsung Electronics together command a large share of the world market for mobile handsets, but are relatively weak in the so-called "smartphone" segment (I don't like this term, because the new phones, iPhone and Android, are really hand-computers or hand-broadband devices) show signs of being caught flat footed by the success of Apple's iPhone in the Korean marketplace.


• The iPhone effect also highlights the continuing high dependence on (or preference for) Korean language web content, as illustrated by high levels of usage of Naver, a Korean-language service, and relatively low levels of usage of Google.  The vast majority of the iPhone and Android apps being downloaded and used around the world are written in English or other languages.  The iPhone in Korea is exposing consumers to many of these applications, disclosing a clear "App-gap" with many of the most useful applications not yet available in Korean.


• The iPhone effect occurs partly because the Apple iPhone has introduced a multi-touch, capacitive touchscreen that is more than just screen technology.  It is a user-interface (UI) that everyone else is copying as we enter this new era of the handheld, internet-connected PC.  The iPhone is faster, easier to use and just a bit more intuitive than any of the competing phones on the market today, including Google's Nexus One and, most pointedly, Samsung's local T-Omnia II.  In this revolutionary era, the iPhone is setting the standard, much the way that the IBM PC did way back in 1980.

The revolutionary transition in mobile handsets from phones to internet-connected computers is well underway, both in Korea and globally.  Given the nature of semiconductors and other components that go into the handsets, it is clear that handsets will soon become a commodity, much like PCs are today, with more or less  modular, interchangeable parts.  The big money and the major impact of this transformation will be found in software and content.  Therein lies the future challenge for Korea.

English-Teaching Robots for Korea by 2018?

An article in today's issue of The Korea Times proclaims "Robots to Replace Native English Teachers."   Participants in a recent robotics forum speculated that, by about 2015 robots should be able to help English teachers in the classroom and that by 2018 they should be able to teach on their own, while communicating with students."  Robots are already available in English classes through a pilot project in Masan, aimed at testing the viability of robotic teachers.   Some participants in the robotics forum also saw English -teaching robots as a remedy for the lack of English teachers in small rural farming and fishing villages.

After reading this article, I remain very skeptical.  Nothing is mentioned about the current state of the art in machine translation and the considerable challenges of teaching English to native speakers of Korean.  The linguistic and pedagogical challenges of teaching English would seem to be too large to be overcome by developments in software and artificial intelligence in less than a decade.  In any event, we'll all see.

Hardware versus Software

The Chosun Ilbo carried an opinion piece today that focused on the relative lack of development of South Korea's software industries.  Among other things, it pointed out that

• Last year Korea exported IT products worth U.S.$121 billion, which accounted for a third of the nation's total exports of U.S. $363.5 billion.


• The leading exports were all manufactured products: memory chips, displays and mobile handsets.


• On the other hand, exports of Korean-made software totaled just U.S. $300 million, less than 1 percent of all IT exports.


• Foreign products take up 78 percent of the local software market.

The editorial concluded with reference to the rapidly growing smartphone market, which shows that manufacturing good handsets is no longer enough.

Korea: Fastest Internet Connections in the World

Akamai has released its latest quarterly State of the Internet report, this one for the 3rd quarter of 2009.  Not surprisingly, it shows that South Korea continues to have the fastest internet connection speeds in the world, and by quite some margin over second ranked Japan.  As shown in the graphic in the upper left (click to see full-size graphic), Koreans on average connected to broadband internet at a speed of 14.6 megabits per second, almost twice as fast as the 7.9 Mbps recorded for second-place Japan.   (Note that Akamai uses its globally-deployed server network to collect data for these reports.  The company estimates that it sees over a billion internet users.)

For further detail, readers will want to download and read the entire report.  Some of the highlights include:

• South Korea has six of the top ten fastest cities in Asia, all with average speeds above 15 Mbps.  They were Masan, Iksan, Koyang, Seocho, Poryong, and Ilsan.


• 74 percent of the nation's population connected to broadband internet at speeds greater than 5 Mbps.  This compared to 60 percent in Japan and much lower percentages in other nations around the world.  Only 24 percent of U.S. citizens connected at speeds above 5 Mbps.


• The breakdown of speed distribution for leading countries, as shown in the graphic below (click to see full size version) shows that South Korea's drive toward implementing Fiber To the Home (FTTH) is having an impact.  Sixteen percent of the population connected at speeds greater than 25 Mbps, a figure no other country matched.

Korean Team Wins World Championship in Texting 축하해요!

The team of Yeong-ho Bae, 18 and Mok-min Ha, 17 defeated a host of challengers to become the world texting champions at the LG Mobile World Cup in New York City.  According to PR Newswire, they split $100,000 in prize money after beating out 24 participants from twelve other countries in an intense five game series.

I read this news with great interest, and found the detail I was looking for in another account of the LG Mobile World Cup.  All contestants texted in their native language using two of LG's current mobile phones: the LG BL20, which has a numeric keypad and the LG GW520, which features a QWERTY keyboard.

Anyone who has visited Korea recently has had an opportunity to observe the speed with which Korean young people text on their mobile phones, so the results of this competition did not surprise me.  However, the results also confirmed my suspicion that the Korean team had a secret weapon:  hangul, the phonetic and very scientific Korean alphabet that is used on Korean-language keyboards.  I believe that any team texting or inputting data in hangul, while other teams are using English or other alphabets will probably come out on top.  It also seems that such competitions must handicap those competitors who are texting in Chinese, Japanese or other non-alphabetic languages.

Some international observers still make the mistake of confusing the Korean alphabet, hangul, with other Asian languages, such as Chinese, that use pictographic scripts.  If it accomplished nothing else, the LG Mobile World Cup should help to clarify that misconception!  So to the Korean team:  축하해요!

Google in China and the Korea Precedent

The news is widely circulating all over the world, except within China where the government is heavily censoring it, that Google may consider withdrawing from the Chinese market.   For example, The New York Times is covering this story. In a second story today it provides interesting detail on how the situation reached its present stage.  Although recent attempts, presumably supported by the Chinese government, to hack into accounts of dissidents in China are one reason the withdrawal is being considered, the broader reason is that Chinese government filtering of the internet runs counter to Google's corporate philosophy and effort to "do no evil."

As last Spring's episode with YouTube in Korea illustrated, the decisions of a particular national government do not necessarily dictate what citizens, these days called "netizens" will do.  Last April, when the Korean government declared that it would legally require real-name information to post comments and videos to YouTube, Korean web surfers did not stop posting such material.  In fact, there was an increase in the use of YouTube, but through sites in other countries. (see my earlier post here) China would no doubt face a similar reaction from its netizens should Google withdraw from the market.

LED Backlit LCD Television Shipments to Rise by Factor of Eight in 2010

I first saw one of the new light emitting diode (LED) backlit Liquid Crystal Display (LCD) televisions developed by Samsung Electronics almost one year ago now.  My wife and I had walked over to a Samsung outlet in the neighborhood.  It was a jaw-dropping experience.  There was such a dramatic reduction in the thickness and weight from the similar Samsung LCD television we'd purchased some weeks earlier that it was almost hard to believe.  The graphic posted here shows iSuppli's forecast for increased worldwide shipments of the LED backlit televisions compared with the older, thicker, heavier models that depend on cold cathode flourescent lamps (CCFL) for backlighting.  In 2010 alone, shipments of LED backlit LCD televisions 40 inches in size and larger will rise by a factor of nearly eight, reaching 18.8 million units, up from 2.5 million in 2009. (Click on the graphic to see a full-size version.)

The greatest driving force in this growth is consumer acceptance and demand.  Based on my first reaction to the new television sets, I'm not at all surprised!  The new television sets are much more expensive than older models and their are still some technical issues, such as LED lifetimes and thermal issues.  However, what iSuppli notes as the "ace in the hole" for these new television sets is that they are in tune with the interest of governments, corporations and people around the world in "going green."  They consume less power than the older sets based on CCFL backlighting.  However, the form factor of the new sets, being just a fraction of the thickness (they are just over one inch thick and light enough for one person to pick up and mount a 55" set on the wall!)

Korea's leading manufacturers currently hold a dominant market position in LED backlit televisions, having introduced them early last year, months before any Japanese or other competitors.

Apple and Android in Korea in 2010

A headline from Telecoms Korea caught my eye this morning.   It proclaimed that "Six Out of Ten in Korea Willing to Buy Nexus One, If Released."  Nexus One, of course, is the new touch screen phone just unveiled by Google, which many have dubbed the "Google Phone."  The Telecoms Korea article cited a quick online poll by SmartphoneNow, a Korean-language web site.  Although the online survey is a decidedly non-scientific poll, 66 percent of a few hundred early respondents put the Nexus One first on their wish list, ahead of other Android phones soon to be released in Korea.  Now that the iPhone is selling better than almost anyone had projected, local research firms are projecting that Apple's iPhone and various Android models will provide healthy, if not overwhelming competition for Samsung Electronics Omnia Series.  This is illustrated by a market projection recently published in Telecoms Korea.  (Graphic at upper left--click to see full-size version.)

 The SmartphoneNow site also carried an interesting breakdown of major parts and their costs in the Nexus One (click on the graphic of the parts classification table in the lower left to see a full size version of the graphic). Like all "smartphones" these days, major components come from all around the world.  However, since Samsung Electronics contributes both the memory (at $20.40) and the mobile display (at $23.50), it ranks number one on this list in terms of the value of parts.  Qualcomm comes in second with parts worth $35.50.  So, if Nexus One does extremely well in Korea, taking market share away from Samsung Electronics own models, does that really hurt Samsung?

The information presented here simply confirms that Korea's mobile market is in the early stages of a complete transformation (I was going to say "upheaval,") with consequences for everyone, handset manufacturers, companies that make handset components, mobile service providers, and of course customers.  In a development that could really shake up Korea's market, Google is selling the phone directly over the internet via its own site, using a picture of the phone plus the headline and tagline "Nexus One -- Web Meets Phone."  That pretty much says it all, it is all about mobile broadband, with the content and applications it makes possible. If you clicked on the previous link, you'll see the notice "Sorry the Nexus One Phone is Not Available in your Country."  I wonder when it will be and which of Korea's mobile service providers will offer it.

The rapidity with which customers in Korea express a preference for Android-based phones, before they even arrive in the Korean market, is indeed interesting.   However, in one sense this is not at all surprising.  Korean customers are "tech-savvy" and easily capable of discerning that all phones will very soon be hand-held computers.  For Korea's mobile sector and its IT industry generally, the best strategy will be to open the marketplace up, not only for the Nexus One, but for all the new handsets, tablets and other devices that will emerge in the second decade of this century.  Doing so may mean hardships in the short term for some companies, but they will strengthen Korea's case to be one of the world's most important testbeds for cutting edge new technology.  Apple's iPhone and various Android models should do very well here this year!

Google Fast Flip--a powerful new news tool.

I've been interested in news all my life.  In college I worked for a radio station that became an NPR affiliate, and during the summer of my junior year I was a summer intern with the Voice of America in Washington, D.C.  Not surprising, then, that I would choose television coverage of international affairs as my dissertation topic in grad school at Stanford and that the dissertation would form the basis for my first book, Television's Window on the World.

Enough about my background and my books.  You can read any of them or download PDF versions via Google Books or my personal web site.  The point of this post is to recommend that you try Google's new Beta service called Fast Flip.  I especially commend to you fast flip for mobile, preferably on an iPhone or an Android with a good capacitive touch screen interface.

When I first tried out Fast Flip on my iPhone 3Gs, I mistakenly thought it was based on the 4,000 plus news sources represented in Google News.  To the contrary, it is an experiment based on an agreement between Google and the news outlets you'll be able to access via the Fast Flip service.  Nevertheless, it offers a glimpse into the future of scanning for news over the internet.  It makes news sites 1) fast to load, 2) easy to scroll or flip through, and 3) they look like the print versions.  A librarian blogger has a good description of some of the Fast Flip features and potential.

The mobile version of Google Fast Flip is a blast and I predict it will be a surefire success, at least in English.  I'm not sure whether there is a Korean version yet, but there should be!

iPhone Best-Selling Phone in Korea

Today there is further evidence that Apple's iPhone is taking the Korean market by storm, especially in the absence of Android handset models that can offer real competition.  During the first week of December 2009, the iPhone posted a 10.2% market share of all mobile handsets, not just the so-called "smartphones."   This was according to Atlas Research Group in Korea.

The tech media and blogs are full of reports about the forthcoming launch of the "Google phone."  According to these reports, it will have an AMOLED touch screen that is larger than the iPhone 3Gs's, and some other nice hardware features.  However, having used the iPhone for a few weeks now, I would underscore that it is the applications that make all the difference.  For example, one of the nicest new Beta services for mobile from Google is called "FastFlip."  It draws on the substantial resources of Google news, Google alerts and related services and is very user-friendly, even in its initial Beta form.

"iPhone Woes for Foreigners" Symptom of a Larger Problem

I started my newspaper reading this morning with an article in yesterday's Joongang Daily entitled "iPhone Woes for Foreigners."  Since I am a foreigner living in Korea and I recently purchased an iPhone, I read the article with great interest.  I've lived and worked in Korea continuously for the past 13 years and my wife is Korean.  Nevertheless, it was NOT EASY to purchase an iPhone here.

My understanding is that there are approximately one million expatriate workers in Korea now, and that the number is increasing.  Furthermore, I'm reading a lot these days about how the Korean government is seeking to attract not only foreign investment, but more foreign workers to Korea.  Under these circumstances, it seems counter-productive to make it difficult for foreigners to purchase an iPhone.   Those of you interested in the details of this matter can read the Joongang Daily article.

I simply want to note that the iPhone situation is part of a much larger problem relating to language, culture and mind-set.  Think, for example, of the generally dismal state of banking services for foreigners in Korea.  Alternatively, think of the heavy reliance on and satisfaction with Korean language web content and applications (over 70 percent of Koreans using Naver when Korean-language Google is superior for many purposes).

My recommendation:  Korea should begin to offer special services, across the board, for foreigners who are here teaching English, teaching other subjects, working in industry, or otherwise contributing to the economy and society.  If the worry is simply that foreigners will leave Korea with unpaid bills, it seems to me that could be handled for different categories of customers, in accord with the risk, by using a REFUNDABLE deposit system.