By Kim Tong-hyung
Staff Reporter
01-03-2010 19:31
http://www.koreatimes.co.kr/www/news/tech/2010/01/133_58373.htmlThere is no doubt that 2009 was the year of the smartphone. In the last 12 months, the Korean mobile market was hit by a wave of intriguing devices, such as the iPhone 3GS, Blackberry Bold and T-Omnia II.
The popularity of these devices will undoubtedly carry over to 2010, and this year will have wireless carriers competing to provide better systems to maximize the abilities of such handsets and also offer a larger variety of flat-rate data plans to increase user revenue.
Suddenly, the mobile Internet explosion, which, up until now, had been an unfulfilled prophecy, seems to be just around the corner, and this could very well prove to be the biggest story in technology for 2010.
``It looks like 2010 will be remembered as the year when mobile Internet finally takes off, as the conditions are ripening,'' said Lee Wang-sang, an analyst from Woori Investment and Securities.
``The release of the iPhone was the difference, as it sparked an interest in smartphones in the average user. The popularity of these devices and the moves by carriers to lower their data rates will combine to significantly increase mobile Internet usage.''
Smartphones, which support a variety of functions such as Web browsing, e-mail and multimedia atop of voice, had been a hard sell here in previous years, as the devices were too expensive for most mobile users.
Obviously, there was little reason to pay the premium for feature-rich phones, when data rates were absurdly high and wireless carriers often stripped Wi-Fi from the devices to shove users to their cellular networks.
However, carriers like SK Telecom and KT appear to have finally come to the realization that they will never get a significant return for their massive third-generation (3G) investments without making the mobile Internet more essential to the average user.
Of course, the decision by the companies to make their data services more affordable was also connected to their confidence in hardware, as they finally felt they had sexy enough devices to stoke the interest of their hard-to-please customers.
Changing Mobile Landscape
Korean mobile users had eagerly awaited the arrival of iPhone for years, and much of their frustration was vented toward KT, which was quick to declare its interest for the planet's hottest gadget but soon experienced difficulties in its negotiations with Apple.
The repeated delays in the debut of Apple's do-it-all handset had the blogosphere dubbing KT as the tech industry's equivalent of the ``boy who cried wolf.'' However, the lesson, as always, is that the wolf appears in the end and decimates its surroundings.
Since its Nov. 30 release, iPhones have been flying off the shelves, with KT managing to sell more than 200,000 units in the first 30 days of release.
This easily makes iPhone the most popular imported phone ever and also shakes the hierarchy of a local handset market that had been dominated by the duopoly of Samsung Electronics and LG Electronics.
SK Telecom, the country's biggest mobile telephony operator with a 50 percent-plus market share, isn't too giddy about KT getting to claim it has the coolest device.
The company is now trying to steal KT's iPhone thunder by fully committing to smartphones powered by the Google-backed Android operating system.
SK Telecom expects to release the Motorola Droid, currently the most hyped handset in the Android community, in January, and may follow with another Android device by Samsung in the following month.
The Android handsets will be the new heart of SK Telecom's smartphone lineup, which will see the influx of 15 or more new phones this year, company officials said.
KT and LG Telecom, which is the smallest of the three mobile carriers, are both promising up to 10 new smartphone releases in 2010, adding fuel to the completion in the premium phone segment.
Industry sources predict that the domestic sales of smartphones this year will mark around 2 million units or more. Smartphones will be critical for mobile operators, who need to boost data revenue to make up for a saturated voice market.
The devices are just as crucial for electronics makers, as they provide larger margins than conventional handsets.
Internet companies are also expecting to reap the benefits of the smartphone boom, with Web sites such as Naver, Daum and Cyworld updating their desktop applications for use in mobile devices to expand their revenue pool for search advertising.
``The share of smartphones in the handset market had been around 2 to 3 percent just months ago. However, with the success of iPhone and other devices, the smartphone share in the overall handset segment is now approaching 20 percent,'' said a KT official.
The wealth of software applications could make a crucial difference in the smartphone competition, as seen by Apple's App Store online applications store providing the foundation for iPhone's global success.
KT is about to debut its ``SHOW App Store,'' which will provide software programs for its non-iPhone smartphone users. SK Telecom has been operating its ``T-Store'' online applications store since September. T-Store currently has more than 210,000 subscribers.
Korea May See Fourth Mobile Operator
The increasing popularity of smartphones is not the only significant factor expected to reshape the telecommunications industry in 2010.
The country could in fact see its fourth mobile telephony operator by August, the result of the government exploring ways to open up competition and increase the pricing pressure on existing mobile telephony carriers. And who knows, there could be a fifth.
Last month, the National Assembly's committee on broadcasting and communications voted to pass the bill on a revised telecommunications law, which included provisions on the introduction of mobile virtual network operators (MVNOs), put forward by the Korea Communications Commission (KCC).
MVNOs are companies that buy wholesale minutes, text and data from wireless network operators like SK Telecom and KT, and resell them to consumers under their own service brands. Should lawmakers decide to endorse the plans, the country may see its first MVNO in the summer.
Multiple companies, including banks, credit card firms, retailers and cable television networks, are currently showing interest in offering mobile telephony services as MVNOs.
Should they make the jump, these companies could contribute in diversifying the landscape of wireless services. The prospects include the development of non-phone wireless services, built around e-book readers, in-vehicle computers and other devices, and an accelerated push for the ``mobile wallet,'' which will have handsets doubling as credit cards.
Cable television operators, such as CJ HelloVision, T-Broad, HCN, CNM, are under discussion to chart their strategies for possible mobile telephony services and also form a unified front against telecommunications companies to improve their conditions for an entry into voice services.
Small- and mid-sized telecommunications companies, such as Onse Telecom and Enex, are also planning to provide voice services as MVNOs. Onse has been specific about its business plans, looking to lure 2 million mobile-phone customers this year, which will account for about a 5 percent market share, and generate about 1 trillion won in revenue from them.
On the non-phone side, e-books seem to be driving the MVNO buzz. Kyobo Book Store, the country's largest book retailer, is in talks with KT over introducing a wireless service allowing subscribers to download books, magazines and newspapers from e-book readers.
Another priority for telecommunications companies is to generate revenue by extending their presence to other sectors through cross-industry alliances or convergence technologies.
SK Telecom recently announced an industrial productivity enhancement (IPE) initiative that is focused on tapping into new opportunities in retail and distribution, logistics, finance, education and healthcare, by using its technologies to provide more effective solutions in each area.
Through its IPE strategies, SK Telecom plans to generate an additional 20 trillion won in revenue by 2020, with more than half of the amount coming from foreign markets.
KT and LG Telecom are also looking for new opportunities in convergence services and business-to-business (B2B) markets.
thkim@koreatimes.co.kr
http://www.koreatimes.co.kr/www/news/tech/2010/01/133_58373.html
