Korean Government to Set Up App Store

Why am I not surprised to read in The Korea Times that the Korean government is planning to set up an online app store?  One reason is an incident I vividly remember that occurred sometime last year.  My wife and I were waiting at a bus stop to catch the airport bus on one of our trips to the United States.  Right in front of us, a policeman stopped a black sedan that had made an illegal U-turn a few hundred yards up the street.  However, instead of pulling out a pad of paper to issue a ticket, the policeman punched some numbers into his mobile phone and showed it to the driver.  Within a few minutes the whole process of issuing a traffic ticket was finished, with absolutely no uncertainty about the identity of the driver and other relevant details.

In certain respects, South Korea is leading the world in e-government.  The Korea Times article reports that the government is now looking to set up a government "app store" to improve the distribution of public information such as weather forecasts, traffic updates and job openings.  An official from the Ministry of Public Administration said that the plan is to launch the app store as an internet site and then expand it to mobile platforms.  By allowing the public access to and use of public information the private sector will be given the means to create more value-added services.

It will be most interesting to see how the government's plans work out.

Forecast for Touch-Screen Mobile Phone Growth

Here in Korea, Samsung Electronics, LG Electronics and other companies are racing to develop advanced touch-screen technologies in the wake of the Apple iPhone's debut.  And they should be racing.

Back in December of last year, shortly after I had purchased my Apple iPhone 3GS, I wrote a post talking about capacitive versus resistive touch screens.  The capacitive touch screens, led by the iPhone are the ones most prized by consumers because of their speed and responsiveness.

Not surprisingly, the market for touch-screen mobile phones is projected to expand rapidly over the next several years.  A recent study by Displaybank (click to see a full size version of the accompanying graphic) suggests that one in four mobile phones will be touch-screen models by 2013.  I expect that most of these will be capacitive.  As the processor speed of these phones increases, along with improvements in the touch technology, they will give users a sense of wielding the power to instantly retrieve and manipulate vast amounts of information with simple taps, swipes and other gestures of the thumb and fingers.  These are indeed handheld computers, empowered by GPS, digital compass, other sensors and most importantly, high speed internet access.

SK Telecom Still Doesn't Get It: Smartphones and VOIP Services

It appears that the leadership of SK Telecom, South Korea's leading mobile service provider, have not yet comprehended what is happening to the mobile communications market here, and the implications for their business, both medium and long term.  As noted in the Joongang Daily, beginning next month SK Telecom will start charging customers for voice services on a per-second basis, rather than in 10-second increments.  This will make Korea the fifth country to have such a charging system and will save SK Telecom users an estimated $14.5 million every month.  However, at the same time SK Telecom announced that it would continue to block use of VOIP services on its smartphones!

What is even more remarkable than the announcement as reported in the Korea Herald,  is the company's reasoning that allowing its smartphone subscribers access to cheap internet calls using services like Skype will "deal a blow to its revenue."

One probable result of SK Telecom's policy, if indeed they stick with it, will be an increasing number of its customers who drop SK Telecom's service in favor of Korea Telecom.   That's what I did late last November and I haven't had a single regret.  Skype, by the way, was one of the first applications I loaded on my iPhone 3GS and it works great!

The leadership of Korea Telecom seems to have a better grasp of the revolutionary changes underway in mobile communications and greeted the SK announcement by saying that it would continue to focus on reducing mobile internet charges rather than on calling tariffs.  KT is also moving broadly to offer useful content and applications, which will no doubt generate handsome revenues.  SK Telecom would be wise to do the same, rather than cling to dwindling voice revenues as a source of future revenue.

More on the Microsoft Monoculture in Korea

The explosive transformation taking place in South Korea's mobile broadband market is creating ripples that go in all directions.  The local media and blogs are picking up on the fact that Korea's electronic transaction and internet banking regulations are causing inconvenience for users and businesses.  The current laws favor a sort of Microsoft monoculture, which has been the subject of earlier posts.

The Hankyoreh carried an excellent article on this topic a couple of days ago.   When I saw the drawing that accompanied the article, I just knew that this would require a post here.  It depicts Microsoft's ActiveX as a ball and chain restraining Korea's online market and online banking.  A great illustration with a powerful message!

Chipmakers to Battle in the Smartphone Market

The next big battle in the semiconductor industry, as described by an article in The New York Times today, is over chips for the coming generations of hand-held mobile devices.  As the article aptly begins, "The semiconductor industry has long been a game for titans."  The going rate for a state-of-the art chip fabrication factory is about $3 billion.  The plants typically take years to build and the microscopic size of chip circuitry makes for challenging engineering in order to keep up with Moore's Law.

The next phase of chip wars will focus on smartphones along with tablet and notebook sized devices.  Intel, which until now has had a very small presence in the smartphone market, is joining the fray.   The current market leader is ARM Holdings.  Global Foundries, a spinoff of Advanced Micro Devices, this year plans to start making chips at one of the most advanced factories ever built in Dresden, Germany.  Global Foundries has been helped by close to $10 billion in current and promised investments from the government of Abu Dhabi.

Other competitors in this industry include Taiwan Semiconductor Manufacturing, United Microelectronics and, of course, Samsung Electronics.

North Korea Reportedly Cracking Down on Cell Phone Use

The Eurasia Review and other sources are reporting, not surprisingly, that the North Korean government is again attempting to crack down on the use of Chinese cell phone services.  One recent defector from North Korea reported that the North Korean authorities were jamming cell phone signals and that it was practically impossible to make a call.  He said that "you can switch phone cards and the call appears to go through, but nobody in North Korea picks up."  North Korea also appears to have made overseas purchases of expensive cell phone tracking and jamming equipment which it has installed at various locations in Shinuiju, Hyesan, and Hweryong in the border area near China, according to North Koreans living in border areas as well as those in South Korea.

The Future of "Smartphone" Operating Systems

An article in the Joongang Daily today points to the obvious importance of operating systems in the rapidly changing "smart phone" market.  As shown in the accompanying graphic, the iPhone and Android phones are expected to gain market share over the next several years, at the expense of Symbian, Blackberry and Windows Mobile.  As the article notes, consumers are more and more likely to ask themselves, "Do I want an Android or a Windows Mobile?" rather than "Do I want a Samsung or Motorola?"  This observation is partly true, but what is really going to drive consumer decisions in the next several years is not the OS per se, but rather the information that is accessible and the power of the applications allowed with that OS and how the OS interacts with the applications.  To put it another way, if Google's array of online applications work equally well on an Android, iPhone or Symbian phone, then those three operating systems are going to share the market roughly equally.  It is the underlying content and information, rather than the OS itself, that will determine the power of these new handheld devices.  They are more than simply "smart phones," and they are also more than just a hand-held personal computer.  They are information machines that draw heavily upon mobile access to broadband internet, global positioning data, and live visual information (as in augmented reality applications like the iPhone's INeedCoffee app here in Korea).  It will indeed be interesting to see which OS prevails, but it would seem that in terms of applications that "organize the world's information" Google is way out in front.  That is why I would not be surprised if Android phones take up even more of the global market by 2012 than the graphic here (click to see full size graphic from Gartner) suggests, on the shoulders of Google's information services.

Multiple Screens: Digital Convergence Gathers Strength in Korea

Several articles in the newspapers this morning offer concrete evidence that the convergence of digital media in South Korea is strengthening and accelerating.   According to The Korea Times, both KT and SK Broadband are doubling their investment in IPTV this year from last year.  They also aim to double the number of IPTV subscribers this year, over the number in 2009.

Not surprisingly, The Korea Times report notes that IPTV is driving broadband usage and demand, particularly when it is bundled together with fixed line and mobile services.   In fact, SK Broadband in partnership with SK Telecom will promote a "three screen (TV, PC and Mobile) package to smartphone and IPTV users.  This reinforces a point made in my last post.  With convergence people will sometimes use a handset, sometimes a tablet, and sometimes a desktop PC, but increasingly they want the same content available at the touch of a finger on all the devices.

Three screens by no means represents the limit, since another new consumer trend is that people are putting the new flat screen television sets in more rooms of the house than just the family room or entertainment room, at least in Western countries.  

Samsung Takes on Apple

One of my Google alerts this morning turned up an interesting short article in Forbes with the headline "Samsung Takes on Apple."  The report noted that Samsung is hurriedly developing its own tablet computer to rival Apple's much-hyped iPad.   The report quoted the President of Samsung's mobile communications division as saying "We will respond."  Samsung reportedly has several major projects in the works, with the other major focus being to increase its dominance in the smart phone market.

I'll say!   The current revolution in mobile communication is all about bringing mobile broadband internet to consumers, whether that be via a phone-sized device, or a notepad size device.  People will use a hand held device differently than a note pad or notebook size device.  However, in general I think it is safe to assume that most people would like to have the ability to fully synchronize information and applications across all of their devices.  A notebook or even a small desktop machine is more comfortable while sitting at a desk, while a notepad device may be ideal while lecturing or conducting a tour, and the mobile-phone sized devices, of course, are the most mobile because of their size.

Samsung is right to take on Apple, because the latter company is so far leading the way in creating fast, easy and intuitive user interfaces for the mobile internet.

KT to Seek Management Control of BC Card

In another symptom of the coming era of mobile broadband and ubiquitous networking, Korea Telecom has announced that it plans to buy a large stake in BC Card and eventually gain management control of the company.  According to the Joongang Daily, KT has already signed a memorandum of understanding to acquire Shinhan Card Co.'s 14.9 percent stake in BC Card (see graphic).  A spokesman for KT said that "We see a great possibility in creating synergy between telecommunication and finance."

An earlier post noted that e-business in Korea is mired in the past because of an overly-heavy reliance on Microsoft software, and legal requirements that led banks and other businesses to require the use of Microsoft's Internet Explorer and active-X controls for internet transactions.   Obviously, Korea Telecom is looking beyond the present situation to a future in which most Korean consumers will use mobile broadband via iPhone, Android or other handsets.  There are currently over 24 million mobile phones equipped with USIM (universal subscriber identity module) chips which can identify subscribers and store various content, including credit card information.  In addition, KT is reportedly mulling over new services in which a customer might search for a restaurant using their smart phone, pinpoint its location, and pay the bill using a credit card and coupons downloaded to the smart phone from web sites.

The mobile broadband era is coming to Korea, and it is going to arrive very fast, for the simple reason that consumers want mobility and they want these services, just as in other advanced countries around the world.

Google to Test Fast Broadband in Selected Communities

Google announced on Wednesday that, in an effort to spur innovation in the United States, it would launch a project to offer fast broadband service in selected communities.  According to The New York Times, and a post on Google's corporate blog, the company will test a high speed fiber optic broadband network capable of allowing people to surf the web at 1 gigabit per second.

How does this relate to Korea?   As many of you know, this country is already building a nationwide fiber optic network that will deliver gigabit per second broadband speeds to all major communities in the country by 2012.  If Google and Korean policymakers are correct, this should make South Korea, along with Google's selected communities in the U.S., centers of innovation!

Korea's "IT Powerhouse" Paradox

I've been puzzling a great deal these past several months over the paradoxical situation that exists in South Korea.   On the one hand, this country has the most advanced and extensive digital networks in the world, yet it managed to lag behind much of the world (80 or more other countries) by two and a half years in adopting  mobile broadband, as symbolized here by the Apple iPhone.  How could a country that invests so much in education, R&D and infrastructure, find itself in this situation?  The following are some thoughts I have.  They are only initial attempts to find an answer, and I'd love to receive some incisive comments on this post.

• The information and communications technology (ICT) and telecommunications sectors in Korea are dominated by large companies, including the chaebol groups.  Inside these large companies the workers and the labor unions exert a great deal of influence, making it difficult for them to adapt quickly to technological change.


• The established mobile service providers, along with the manufacturers of handsets and network equipment, were making a lot of money with the current arrangments, so why upset the apple cart by introducing the iPhone or Android phones to the Korean market?  If we include the government here, another interpretation could be that, while profitable in the very short term, this was a costly policy mistake for Korea over the medium to long term.


• Finally, I cannot help but observe that language and culture played a role in all of this.  After all, Koreans have not yet widely adopted Google as an internet search engine, preferring Naver to search within a Korean-language walled-garden.  Heavy dependence on Naver and other Korean language portals, along with overly-heavy reliance on Microsoft, undoubtedly contributed to the lag in introducing real mobile broadband via the iPhone and Android phones. 

These are some of my preliminary thoughts.  What is missing in this picture?  I invite your comments.

Government to Spend $341 million on IT Workforce Training

The Korean government has announced that it will spend $341 million to fund a four year program aimed at enhancing the country's information and communication technology sector.  According to the Joongang Daily, the money will be used primarily to train basic researchers for the corporate world, with lesser emphasis on training for employees of government agencies and in the IT convergence sector.  The money will be given primarily to universities across Korea to develop training programs and provide students with financial support.  The primary emphasis of this new funding, in a departure from past patterns, will be on graduate level training rather than undergraduate.

Korea's e-business Mired in the Past?

An editorial in the English edition of the Chosun Ilbo today declared that "Korea's E-Business is Mired in the Past."  It pointed out that people in Korea cannot shop online, do internet banking, or access government or tax office sites using their smartphones.  The editorial notes that this is unheard of in the 80 other countries that introduced smartphones (read Apple iPhone and Android phones) before Korea.

The reason for this situation is the officially certified electronic payment standard used in Korea, which was introduced in 2000.  To meet that standard, local companies developed solutions that were only compatible with  Microsoft's Internet Explorer browser and required use of ActiveX controls.  According to the Chosun Ilbo, Korea is the only country in the world to use a certification program using only ActiveX functions. Furthermore, it notes that other countries have chosen standard web technologies that can be used on both personal computers and smartphones and do not require users to download one ActiveX security program after another to make a single electronic payment.

Seamless Home Networking to Debut in 2011

Not far in the future, when a housewife is caught in an unexpected rain shower, she won't have to rush home to close the apartment windows.  Instead, she will be able to use her cell phone to shut the window through a ubiquitous home networking system.  Not only windows, but almost everything in the home will come under the control of its owner when home networking is fully realized.

As outlined in The Korea Times, the government this year is preparing standards for such home networking systems. Starting March 2011, any newly-built apartments will have to equip their network gateways with a general purpose engine developed by the state-run Electronics and Telecommunications Research Institute late last year.  The engine will bridge the differences of various technologies or communication protocols.  Older apartments will also be able to add the ETRI engine to their gateways as the government plans to offer the program free of charge to enable upgrades to older systems.