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!

Most Korean Handsets Manufactured Overseas

As reported in the Joongang Ilbo today, the number of Korean handsets manufactured outside of Korea now exceeds the number being manufactured domestically.  Last year 58 percent of the 354.8 million handsets that were shipped by Korean mobile phone manufacturers were made abroad, the first time that overseas production exceeded that of domestic production.  (see the accompanying graphic.  Click on it to view a full-size version)

Korean companies, led by Samsung and LG, have been increasing their overseas production to lower costs and increase production capacity.  Samsung, for example, is manufacturing handsets in China, Vietnam, India and Brazil, while LG is doing so in India and Brazil.

On a concluding note, the Apple iPhone 3GS I'm currently using is "Made in China."

Question for Readers of This Blog

I would like to pose a question for readers of this blog, and would encourage you to post your answers as "comments."  If you do not want those comments to be publicized, please make note and I will respect your wishes.



The question is as follows.  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"?   In your answer to this question, I would appreciate it if you could specify the major reasons why this happened.  For example, was it a failure of government policy?  Was it that the private sector (LG, Samsung, SKT, KT) feared loss of profits?  Were there cultural or linguistic factors?



I would welcome comments from scholars, government officials, industry executives and any interested members of the public.

North Korea Uses Linux to Advance Computer Technology

The DMZ which separates North and South Korea also represents the largest, deepest digital divide in the world.  To the South, The Republic of Korea has the worlds most advanced and dense digital networks, while North Korea, by comparison, has barely started to build such an infrastructure.

An article in The Korea Times yesterday provides some interesting detail about how North Korea is attempting to close the digital divide on the software side of the ICT sector.  This is interesting because South Korea, while extremely strong in ICT hardware manufacturing and exporting, has historically been relatively weak in software. Earlier posts on this blog have called attention to its heavy reliance on Microsoft, to the point of being a "Microsoft monoculture."

In a strategically interesting move, North Korea has developed its own version of the Linux open-source operating system, called "Red Star."  (Click on graphic to see full-sized version of a Red Star home page) According to researchers at South Korea's Science and Technology Policy Institute (STEPI), the software is currently being used mainly to monitor the web behavior of North Korean citizens and to control the information made available to them.  However, the fact that they are developing an operating system to control the flow of information within the country is meaningful in itself.  North Korea seems to be looking to expand the use of its computer programs into more areas.  Prior to developing Red Star in 2002, the North Korean government relied on the English version of Microsoft Windows, according to STEPI.