The Los Angeles Times story entitled "Apple's iPhone is Invading South Korea, home of Samsung's Galaxy S," is getting quite a bit of attention these days, at least in the blogosphere. It will not surprise readers of this blog that I cannot resist commenting on the article. For one thing, the "invasion" is already over, having taken place more than a year ago. Just use the search feature to the right and enter "iPhone" and you'll see that I began posting on this topic back in 2008, over a year before the iPhone finally arrived here. By that time, it had become very apparent that something was amiss in South Korea's mobile market. It was missing out on a major global trend toward mobile broadband, epitomized by the Apple iPhone. Even when the iPhone finally arrived in South Korea near the end of 2009, there was another months-long delay before Android-based phones began to appear.So, it is difficult to conceive of the Apple iPhone's entry into the Korean market as described in the L.A. Times article as a "bold offensive by a foreign competitor invading its lucrative home turf with a breakthrough product." In fact, the iPhone arrived in Korea about two and a half years after its introduction in the United States!
Some of the reasons why it took so long for the iPhone to reach this market have been explored in earlier posts on this blog. However, it is now safe to suggest that this delay did not necessarily work toward the best overall interests of either consumers here or the large mobile handset manufacturers like Samsung and LG. In fact, as noted in an earlier post, Korean exports of mobile handsets took a huge hit because of the delayed transition to smart phones. Of course, the drop in exports was partly compensated for by the fact that most of the high value-added parts in the iPhone are manufactured by Korean companies.
In late 2009 when the iPhone arrived in the Korean market, many industry estimates suggested that there might be 700,000 or even a million customers for the new phone. In fact two million iPhone handsets have been sold in just over a year since its introduction.
The larger impact of the iPhone in Korea can only be understood by looking at the broad transition that is now underway here toward mobile broadband. In important respects, this development was artificially delayed by the obstacles that prevented a more timely arrival of the iPhone and Android phones. Clear evidence of the rapid transition to mobile broadband can be found in various places, including the rapid uptake of Facebook and Twitter here, as touched on recently.
Many in Korea, perhaps led by top executives of KT, would suggest that the arrival of the iPhone and the accompanying "smartphone shock" were less of an invasion than a blessing or "wakeup call" for South Korea's market and its exporters.