Samsung is currently working on upgrades of their mobile phone, especially the smartphone market, reports Maeil Business, in order to give the iPhone a further challenge. As I mentioned before on this website, Samsung lost some market share to Apple, as have all companies in this segment, but Samsung still provides up to 40% of the parts used to produce the iPhone.

They plan to unveil more specs about the new phone at the Barcelona Mobile Phone Conference on February 11th. The phone will have web-searching capabilities, GPS, among other functions. Also, in another project, Samsung is also one of the partners in Android, one of Google’s star projects, in which Samsung and Google’s quest for the “Moving PC” have aligned.

We should all expect many interesting things from Samsung in this upcoming Conference, given their innovative nature and stylish designs, along with them securing a more dominant position given Motorola’s freefall.

As many blogs and tech news sites have reported the IFPI, or the International Federation of the Phonographic Industry has released a new report on the state of the worldwide music industry. This new report sheds some light on the current trends and gives us some ideas on what to expect from the future. The Industry grew 40% in 2007 and increased its market share in the complete music business from 11% to 15% of the industry.

When focusing on Korea, we find that Korea is the first market in where digital music content values surpassed that of physical, and at this moment digital represents around 60% of the industry. Korea is considered the 4th biggest digital music market in the world after the US, Japan and the UK. In Korea, 63% is from online activity and 37% from mobiles.

Some of the larger players in this market are locals Melon, owned by SK Telecom, and Dosirak, owned by KTF. These are the familiar players in most telecom, media and technology markets. As the digital music market report states, Korea is one of the best examples of potential for the digital music business and for any other digital media in general.

Recently at my company Veyond, we have hired an intern from Mexico, and he constantly points out many of the differences between Mexico and Korea in terms of telecom, media and technology. This makes me think again about many of the advantageous things that my country, Korea, has achieved in terms of technology.

My thoughts don’t stop here, but are still extended further into thinking about some of the reasons why we have advanced to this level. One factor that we inevitably run into every time is the government. For those unfamiliar with the Korean market, the government here has successfully coordinated efforts in R&D for many years, through agencies such as the MIC and ETRI. It has played a central role in bridging coordination problems, and given direction to technological advancements in the country.

There is some uncertainty now, given that there are some indications that at least in the TMT sector, the government’s role may be changing, given that the new administration is looking to change the structure of governmental agencies related to the TMT sector. How and to what extent this will affect the future of IT in Korea is still to be seen, but for anyone wanting to understand the Korean market, or take insights from Korea to apply to other markets, the government’s role must be well accounted for.

Two Korean companies are scheduled to offer free internet security programs that include real-time scanning. On one side we have the owner of the Korean search engine giant, Naver, through their parent company NHN Corp. in partnership with Ahn Labs have developed a program named PC Green which will be released in April.

On the other side, a smaller company, Altools, has developed a program named ALYAC with similar features. Altools is also a Korean company that has developed other free software applications. NHN definitely has an advantage in respect to Altools given that they can distribute their product through Naver which runs around 70% of the searches in Korea. 

The mass availability of different software at increasingly low, or at non-existent prices. The tendency towards free anti-virus programs seriously threatens the internet security industry, and is certainly a sign of restructuring in said industry, therefore giants like Symantec and McAffee should be alert on what’s going on here in Korea.

When looking at the evolution of mobile phones it is striking to see the technological development, but it is also quite interesting to note the adoption of fashion in the industry. Not only are the devices we use developing more functions, but companies are now spending more and more time an money investing in creating the most stylish designs and sometimes getting fashion giants to support the effort.

Korea, as in many cases, is a front-runner given that mobiles are so advanced, and mobile culture is so embedded in modern Korean society that phones are now a symbol of status. Korean giant LG teamed up with Prada last year to unveil a luxury phone, as well as with designers Paul Smith and Lee Sangbong.

Other companies have had similar partnerships such as Samsung with Adidas and Armani on different projects, and Motorola with Dolce and Gabana. What these companies have done is not by mere chance but by correctly reading the market. In Korea for example, it is said that the replacement cycle for mobiles in certain segments is of 6 months, which is now aligned with fashion cycles, and shows the growing importance of the luxury mobile phone market, and the influence of fashion in general in the industry.

Many of the leading wireless internet solution vendors are Korean. One of them, Neomtel, was noticed today by iNews since they receive royalty from Qualcomm through their cash cow Simple Image Solution (SIS). Qualcomm uses a part of the image compression solution in their core technology and for that they have paid an accumulated royalty of about $10 million to Neomtel. Qualcomm was also nice enough to award them for Best Extension Technology Application at the BREW awards 2003.

Neomtel is currently holding about 40 % of the mobile graphics market worldwide and SIS is the standard not only for Qualcomm but also for the three main carriers in Korea (SKT, KTF and LGT). Motorola also uses them for their GSM standard format. Neomtel is currently phasing out SIS and evolving towards their more advanced product VIS, in their mobile content software. UGC and other contents are starting to becoming a core activity in the merging of telecom, media and technology and it is interesting to note the important role that Korean companies like Neomtel, Infraware and Reakosys are playing.

As I’ve noticed a couple of entries today about OK Cashbag and mobile coupons (here and here in English).  Through my company Veyond I have been participating in projects related to this matter so I thought I put in some comments.

OK Cashbag is a loyalty program initiated and controlled by the SK Group. It was the first of its kind and is today considered a success for SK, not only economically but also for marketing reasons. They have managed to connect a majority of the Koreans to their program allowing a lot of statistical data to be withdrawn from the database. Now is the system adapting to the technological advancements made in the TMT sector and they seem to manage to keep the success going.

As Chosun described, they are mainly focusing on connecting mobile and Internet. Mobile coupons sent out by message (referred to as Gifticon since they are possible to give away to friends etcetra) can be used at certain shops connected to the Internet. Thanks to SK’s size and that they cooperate with many partners they have a great foundation to utilize a good marketing strategy. Since they have realized the potential of the developments in the TMT sector, we can expect the user base and their usage to increase.   

Since everybody are having their eyes on Las Vegas this week and 2008 just has started, also I must give some comments on what to expect on the technology side in 2008. A list from BBC (as mentioned in the previous post) suggests Ultra Mobile PC’s, IPTV, WIMAX, Mobile VoIP and “Web to go”. Korean ET News in turn suggests VoIP, IPTV, HSDPA, Revision A and WiBro (focused on Korea). The lists do correlate in many ways and I do not want to make my own prediction. Instead it is interesting to pinpoint LG as a company to have an eye open for. The huge conglomerate has interest in both the hardware and software side which makes it a very interesting and different market approach. They are not market leading anywhere but are present everywhere (almost) in the Korean TMT (Telecom, Media, Technology) sector.

They produce handsets, TV’s and other hardware through LG Electronics, provide IPTV, VoIP and Broadband services through LG Dacom/Powercom, they are a MNO via LG Telecom and so on. They don’t have a license to be service providers for WiBro but they have already released phones and computers with integrated support. So they have an interest in all of the fields popular media consider to be the “hot ones” in 2008. As the TMT sector keeps merging it will be very interesting to see how this will benefit LG. In 2008, they will launch the CDMA version of HSPA called Revision A as the only provider and will have the benefit towards the other 3g providers (KTF and SKT) by not having to take the burden of heavy investment. The success is not granted but they seem to be aiming at price conscious customers and the width of their services makes them competitive. They minimize the risks and at the same time does not miss out on any of the hot topics in TMT the coming years.

It is hard to not notice that the giant event Consumers Electronic Show (CES)  is taking place right now in glamorous Las Vegas. After a quick search for companies related to Korea I found 150 companies, a rather impressive number at such an international conference. However, when considering how world leading Korea is in fields such as mobile (Broadband and TV), e-sports, electronics (with giants like Samsung, iRiver, LG) and so on you realize that there should be more. I would also like to see more of these international events here in Seoul - a place where you don’t have to spend a lot of time to be impressed by the advanced technology.

Around the corner from my office a new UGC shop has opened with recording materials for video, audio and so on. I receive business cards with the possibility to scan with my cell phone camera and instantly get the contact information accessible in the phone. At the same time I can drive a car on the highway while streaming videos from the net with help from mobile Internet. Yes, I am impressed by all the new cool gadgets at CES but I wish Korean companies were better to market the competitive edge that does exist here and that so many visitors at CES would be interested in.

As a final argument for this I use this BBC news about the technologies on the rise 2008. The web to go (ubiquitous Internet access), Ultra mobile PC’s, IPTV, Wimax and mobile VoIP are considered the ones to keep an eye on this year. In many ways a list of 2006 or 2007 for Korea…

As 2007 has come to an end, it is a good time to be updated on the Korean mobile market. The market is rather stable and the market shares are rather intact between the three big ones in Korean Telecom - SKT, KTF and LGT.

SKT was fined a couple of years ago due to legislative problems for having a market share above 50% and they are therefore restricted to grow any more (which also means they are having serious international ambitions for the moment). However, as the number of users still increase (mobile penetration is around 90% today) they managed to increase the customer base with more than a million. 2007 was a good year for the mobile market in general and the users increased more than before. However, as the amount of users soon will be peaking, the fight among the existing users will be tougher. LGT are the price pressers and they launched a service of free calls among its customers (for a small monthly fee) in 2007 which forced SKT and KTF to include similar price changes. LGT is not the one with the most new customers in absolute numbers, but they still managed to steal a percent from KTF. KTF are emphasizing the HSPA service very much for the moment.

For more information about the Korean mobile market, feel free to contact me or my company Veyond