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Apple defies sceptics to shake up S.Korean phone market
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Apple defies sceptics to shake up S.Korean phone market
AFP - Thursday, January 28
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A South Korean dealer demonstrates the use of an iPhone at a downtown mobile phone shop in Seoul on January 21. Apple's iPhone is sounding a wake-up call in South Korea's once-closed smartphone market as local manufacturers and service carriers rush to compete with the iconic US model.
SEOUL (AFP) - – Apple's iPhone is sounding a wake-up call in South Korea's once-closed smartphone market as local manufacturers and service carriers rush to compete with the iconic US model.
The iPhone has won almost a quarter of a million users since it finally launched in South Korea last November, and has also expanded the potentially huge overall market for smartphones.
Press articles and Internet postings in the strongly nationalist nation had cast doubt on the iPhone as Apple began a promotional blitz last year. But like elsewhere, South Korean converts are zealous in their ardour.
"The iPhone's cool. It has all these applications that other smartphones do not offer. I think the iPhone symbolizes simplicity and complexity at the same time," said student Lee Su-Jin, 26.
Apple's "apps" are helping the iPhone's growing popularity as South Koreans turn to on-the-go features such as Google maps, listings for Seoul restaurants, news updates and weather forecasts.
South Korea's mobile phone market is one of the world's most vibrant, with 45 million users in a population of almost 49 million.
But until November smartphones only accounted for about two to three percent of the total compared to almost 30 percent in Japan, according to analyst Kim Dong-Joon of Eugene Securities.
Two local giants, Samsung Electronics and LG Electronics, account for about 90 percent of the total mobile phone market.
Authorities began opening up last April, dropping a requirement for phones to be embedded with locally developed software. In September 2009 they scrapped another rule, formally clearing the way for the iPhone to launch.
By the end of this year smartphones will take about 10 percent of the overall market, analysts estimate.
"The iPhone brought changes to the Korean mobile phone market, such as awakening the public's attention to smartphones and triggering competition," Kim told AFP.
He noted that Korea's smartphone market was previously in the grip of Samsung and LG. "And since the market was closed, firms did not bother to try something new and revolutionary, keeping their customers blindfolded."
Shinhan Investment Securities analyst Ha Joon-Do said LG -- which currently has no smartphone on the local market -- has been slow in responding to Apple "while Samsung is racing to improve its existing Omnia series line-up".
The iPhone was launched by KT Corp., the country's second largest mobile carrier with 31 percent of the market after SK Telecom with 50.5 percent.
It attracted 60,000 pre-sale orders and now has 240,000 users, said the KT official in charge of the launch, Ham Young-Jin.
"We definitely believe the iPhone was the wake-up call to start promoting smartphones in Korea," Ham said.
Samsung reacted by announcing sweeping price and tariff cuts. It has now sold some 300,000 Omnia 2 smartphones in Korea, according to a Samsung spokeswoman.
Data from researchers at Roa Group Korea indicates the number of smartphones sold in South Korea rocketed from 30,000 in 2007 to 1.9 million in January 2010.
"When I was purchasing a mobile phone, I thought of a smartphone because it is the trend," said 21-year-old Kim Lee-Soo. She, however, chose Samsung's Omnia 2.
As competition heats up, SK Telecom plans to launch up to 15 smartphones from companies like Motorola, said spokeswoman Lauren H. Kim.
LG, currently the world number three for mobile phones after Finland's Nokia and Samsung, said it aims to become number two by 2012 by exploiting the rising popularity of smartphones.
LG said it plans a new lineup of 20 models this year, based on the operating systems of Google's Android, Microsoft's Windows Mobile and Linux.
Apart from new models, the iPhone's debut has spurred local carriers into improving infrastructure. "It made mobile carriers admit the need to develop wireless Internet and to be more aggressive," said Shinhan's Ha.
The iPhone user Lee said a lack of open wireless Internet service was currently its biggest weakness.
SK Telecom has announced plans to develop wireless Internet for its own users. KT said it currently has 13,000 wi-fi zones and would provide 14,000 more by the end of this year.
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