Last Sunday, the Korean Blue House (the presidential office) publicized Ericsson’s plan to invest $1.5 billion in Korea for the R&D of LTE technology. The statement came after a meeting of Korean President Lee Myung-bak and Ericsson`s CEO Hans Vestberg in Sweden. The Blue House touted it as one of Lee`s major achievements in attracting foreign investment into the country. But it was corrected quickly by Ericsson spokesman asserting company had not such intention. Why does this happen?

[Handshake between Chairman of KCC and CEO of Ericsson]

The context is the current battle for the 4th mobile communication dominant technology. Two standards are competing: WiBro is the South Korean developed variant of mobile WiMax, while Ericsson champions 3GPP Long Term Evolution, LTE. Currently, LTE progresses globally, and Ericsson Korea said LTE would become the dominant technology in the market, accounting for 90 percent of the global market in 2014. Rival mobile WiMax will account for only 1 to 2 percent, according to Ericsson Korea.

Korean manufacturers show different positions. LG Electronics is supporting LTE while Samsung Electronics supports WiBro technology. In fact Samsung owns significant amount of original technology for WiBro and thus are not willing to develop LTE.

The government’s position is quite mixed. On the one hand, they want safeguard its homegrown WiBro in their domestic market. On the other hand, they want Korean manufactories lead global LTE market through exporting. That is why the Korean government wanted Ericsson to cooperate with Korean manufacturers to develop and export LTE devices targeting for the global market.

However, Ericsson’s position is that it would invest in Korea only if the government creates LTE opportunities in Korea.

But Korea stays adamant: “We cannot give up our homegrown technology,” said Korean Communication Commission head yesterday.

It will be interesting to watch if the Korean government’s strategy can succeed. I will follow up with this issue continuously.

To be open or not to be open, that is the question for Korea’s IT industry. It is difficult to judge what right answer is. But the market is obviously shifting toward the openness. This week, however, LG App Store beta-version is launched. Its strategic direction seems against the mainstream of the market trend. In other words, LGE sticks to walled garden rather than to be an open platform.

The current deployment of the service is only available for Windows-based LG GM730 and LG KS20 handsets. The virtual marketplace features 1400 apps.

[LGE’s App Store]

[GM 730 & KS20]

The reason for why LGE takes walled garden strategy is related with the positioning of the service among LGE’s business portfolio. “Unlike other mobile phone manufacturers, LG’s Application Store is not intended to be a new or separate business model,” said Skott Ahn, CEO of LG Electronics Mobile Communication. “It’s an added-value service that comes with LG’s high-end phone and smartphone ownership.” The world’s 3rd largest handset maker still struggle as a minor player in the fast-growing smart phone category and want to keep up with competitor moves, with minimum effort. LGE is just filling the gap in its service offer, copying blindly competitors past practices and missing the shift to “openness” paradigm.

As a matter of fact, Korea’s internet market is often seen as a “walled-garden.” Korea’s leading internet companies such as Daum and Naver is quite walled. For example, significant amount of information in Korea is created and exchanged in the online communities, which are powered by Naver to Daum. But if you search information through Daum, you cannot find information available at Naver’s online community. This closed nature of internet searching platform will not increase benefits of users.

When it comes to App Store, many users are waiting for unique virtual marketplace for all windows-OS based application, without restriction of model or operator. They argue that multiplication of branded marketplaces is a way to create exclusivity. However, the wall is being cracked.

SK Telecom, Korea’s biggest mobile operator, will launch its own App Store in Korea this August on an open platform that supports Windows Mobile, Symbian, Android and Linux, regardless of the phone carrier or phone type, unlike Apple’s App Store. Moreover, Governmental agency KITA in collaboration with Dreamline (one of ISPs in Korea) work on a open platform content portal ( www.wapool.co.kr ).

Even if LGE is quite advancing in terms of its hardware strategy (for example, they are now entering into smart phone market using haptic user-interfaces), it is still old fashioned in terms of software strategy as in the example of walled garden App Store. Beware the wall.

After its recent merge with its mobile phone subsidiary KTF, KT adopted yesterday new corporate identity and new logo : ” Olleh KT”. Exit the corporate neutral blue, KT endorses now a passionate red and an intriguing motto aiming to stimulate creativity.  Reversed Hello,  “Let’s come [the future]” in Korean or Jeju dialect for “Good way”, make your own idea about it.

Changes in management philosophy and focus on 10 strategic tasks supervised by the “Olleh Management Committee” - formerly “Top Management Team” - are expected.