Korea's IT Service Industry Lags Behind World Leaders

Korea is becoming well known around the world for its IT manufacturing industry. However, as reported in the Chosun Ilbo today, its IT Service industry lags behind world leaders. A study of 37 major IT firms including Samsung SDS, LG CNS and SK C&C was released by the Federation of Korean Industries on Monday. It estimates the competitiveness of Korea's IT Service industry at 73.3% of that in nations that lead the industry.

Some of the reasons given in the report were a fixation with low prices, a focus on the domestic market, the lack of a high quality workforce and insufficient investment. Interestingly, lack of foreign language skills and poor working conditions were also cited.

The world IT service market was worth $754 billion in 2008, far more than the markets for semiconductors ($255 billion)and mobile phones ($122 billion). Korean companies account for only two percent of the IT service market.

Korea's Amazing Century: From Kings to Satellites Available Full-View

I'm please to let readers of this blog know that a 1996 book I co-authored with Mel Gurtov and Robert R. Swartout, Jr. is now available full-view on Google Books. It is titled Korea's Amazing Century: From Kings to Satellites. The final third of the book, pages 127-172 summarizes and in some cases updates material from The Telecommunications Revolution in Korea, which was published a year earlier. To download a PDF version of either book, go directly to Google Books or click the bottom-right hand hyperlink to "More About This Book." Enjoy.

Korea Ranks 7th Worldwide in Wi-Fi Hotspots

As reported in the Chosun Ilbo, new statistics from JiWire show that South Korea has 12,814 Wi-Fi hotspots, placing it 7th in the World. The U.S. leads with 68,059, followed by China, the UK, France, Russia and Germany. The majority of Korea's hotspots are part of KT's Nespot service.

The broader significance of Wi-Fi hotspots was noted in a new draft report by Harvard's Berkman Center for Internet and Society. The report is entitled Next Generation Connectivity: A review of broadband internet transitions and policy from around the world. The report is available for download from the Berkman Center site.

The Berkman Center refers to Wi-Fi as providing "nomadic access" to broadband, as opposed to mobile or fixed access. The current trend toward ubiquitous, seamless access therefore involves the integration of fixed, mobile and nomadic access.

Finally, I recommend the Berkman Center's new report to readers of this blog for many reasons. It contains the best comparative analysis I've seen to date of the major international measures of broadband --the ITU and OECD measures, the World Economic Forum, and Leonard Waverman.

Hangeul Soon to Be Useable for Web Addresses: 조선일보.한국 coming soon

Thanks to an action being taken at the current ICANN conference in Seoul, it will soon be possible to use the Korean alphabet, Hangeul, in web addresses.  As reported in the Chosun Ilbo, an ICANN board meeting on Friday is set to approve a multilingual address system.   Under such a system, the web address for the Chosun Ilbo might be (조선일보.한국).   Another issue that will be addressed at the ICANN conference is the proposal to allow the use of any word after the dot at the end of an adress.  This will allow use of nouns and company names.  For example, Samsung might choose .Samsung or a wine company .wine.
The use of Hangeul will certainly add a new layer of convenience to internet browsing for Koreans, who will find it easier to quickly recognize web site addresses.  One interesting question is whether it will really diminish the need for Koreans to learn English, Chinese and other foreign languages.  Most probably not.  For Koreans, their companies and their products to really venture out into cyber space, they will need to use the dominant languages of communication in that space.

South Korea's Green New Deal: The Role of Green IT

The following CNN report shows how central green ICT is to all of the green growth plans Korea has.
Enjoy watching it!

TV Stations Start Broadcasting to Mobile Gadgets---In the U.S.

Why, you might say, do a post about a development in the United States on this blog which deals with Korea's Information Society? Simply to make the point that the U.S. and other countries are following Korea's lead, four years later. This also happened earlier with social networking, as the founding of Facebook and MySpace in the U.S. followed Korea's Cyworld by about four years. Digital multimedia broadcasting was introduced here in 2005 and proved to be a big hit with consumers. So much so that during certain dayparts, more people in Korea watch television on mobile devices than on conventional television sets. Those interested in developments in the U.S. can read the full article in the New York Times.

Cloud Computing in Korea --KT-Ericcson Deal and Some Thoughts

The Korea Times reports that KT and Sweden's Ericcson have formed a united front to nurture eco-friendly information and technology to be used in mobile telecommunication systems.  A KT spokesman said that, with the help of Ericcson, his company would move toward constructing a mobile communication system based on a cloud communication center (CCC) computing structure.  CCC is widely regarded as the next-generation telecommunication technology to maximize digital-related structures by separating the radio unit and digital unit from base stations.
The joint plan calls for KT to set up CCC base stations across the country and to work with Ericsson for early commercialization of this 4G technology.  KT officials say that nurturing capability in higher capacity mobile networks could be a key factor for sustainable green growth.   The article notes that "The mutual partnership with KT is in line with Ericsson's view of the higher market potential in South Korea, analysts say, which as one of the world's most advanced telecoms markets, will provide sufficient regulatory support and operator cooperation to create a 4G-based system."
This is all very interesting.  It raises a number of immediate questions in my mind.

• How with the CCC centers relate to the cloud that already exists, led by information stored and organized by Google?   Access to that cloud seems essential for success.
• More generally, how do the technical aspects of this move to 4G relate to software, applications and content, which is where the large future growth of mobile communications will take place?
• What exactly is the definition of "cloud" as in CCC?

Mobile, Immersive, Interactive Entertainment

I was catching up on Eli Noam's periodic contributions to the Financial Times and found his excellent article on the future of mobile entertainment in a July issue of the paper.  He points out that, at certain times of the day, there are already more Koreans watching television (DMB) on mobile handsets than on conventional television sets.  However, the heart of his argument is that the experience of mobile television is soon likely to be transformed into an immersive, interactive experience that equals or exceeds the quality of watching television on a large screen.  This will come about through new display technology involving eyeglasses or "heads up" displays, and other technological improvements.
South Korea's already strong position in multiplayer online games is likely something that can be translated into successful business in mobile multiplayer games.  Also, it is worth noting that there is a serious aspect to games.  If you don't think so, just check out www.seriosity.com

Mergers in Korea's Telecoms Sector

An article in the Korea Times, accompanied by a nice graphic, depicts the major shifts taking place in South Korea's telecommunications sector. In order to effectively compete in a market characterized by rapid convergence and in which the ability to sell bundled digital services will determine success, several major companies have merged or will soon merge. As shown in the accompanying graphic, the mergers began with KT absorbing its mobile affiliate, KTF. More recently, it was announced that three units of the LG Group will merge. As the Korea Times article spells out, it appears to be only a matter of time before SK Telecom merges with SK Broadband.

As broadband internet, fixed line telephony and mobile internet service all converge, it seems apparent that the mobile communications market will be reshaped into one in which content, applications and software make up the main arena for competition. This is in line with global trends.

KT to Allow Free Internet Phone Calls

As reported in the Korea Herald today, Korea Telecom announced that it will allow free internet phone calls from its mobile handsets. KT said it will introduce a plan which enables both traditional cell phone services and Wi-Fi connections for free internet phone calls. According to a statement, the company sees wireless internet as a growth engine for the future. Telecom companies in Korea have been reluctant to promote internet phone calls for fear that they would cut into revenues. Indeed, KT estimates that the move could initially slash its revenues. It expects a 35 percent reduction in fees for cell phone calls and an 88 percent drop in data transaction fees. However, the new service will be limited to three designated smartphone models.

The Imminent Mobile Internet Revolution in Korea

There is more information to add to my earlier posts on the rapidly approaching shakeup in Korea's mobile market.  A recent article in the Korea Herald highlighted some of these points.   It began by noting that only 10 percent of Korea's mobile phone users currently subscribe to a fixed rate data plan for mobile internet, compared with larger percentages in other advanced countries, as shown in the graphic (click the graphic for a full-size version).  Not surprisingly, revenues from data services in all those other countries are significantly higher than in Korea. The main reason for Korea's low percentage of data-service use, in a country where everyone carries an internet-capable 3G phone is, of course, the outrageously high rates charged for data services.  Also, smartphones make up only 1 percent of total handset sales (I must confess that I didn't realize it was this low!)   All of this while the iPhone, along with the Blackberry and other smartphones have enjoyed booming popularity around the world for the past two years or more.
In the Korea Herald Article, analysts claim that the iPhone will create a breakthrough in Korea's wireless internet services.  One is even quoted as saying that the iPhone will bring about a paradigm shift that will lead to a better telecommunications environment for consumers.  I would simply note that the paradigm shift is well underway all over the world, and it involves not only Apple's iPhone but most notably the Google-supported, open source Android platform, and of course Symbian which continues to lead the world in smart-phone market share.   As noted in my previous post, Android is predicted to move ahead of the iPhone by 2012.
A final thought:  although this post focuses on mobile internet, the continued rapid convergence of digital media means that it has ramifications for converged services in the "ubiquitous network" era that is rapidly approaching.  Mobile handsets, after all, promise to be the key device in that era, providing users with services based on increased ambient intelligence in Korea's cities, towns and even rural fishing and farming villages.

Android to Overtake iPhone in Worldwide Mobile Market

Finally a colleague sent me the study I've been waiting to see.  According to a new Gartner forecast reported by Register Hardware, Android will have more than quadrupled its market share by 2012.  Its market share stood at only 1.9 percent in the first quarter of 2009, but will grow to 14.5 percent by the final quarter of 2012.  This would move Android from the sixth most popular operating system for smartphones to the second most popular, following Symbian.  The main reason for this market share growth is because, unlike Apple, Google licenses their OS to multiple original equipment manufacturers (OEMs).
If this projection is even close to accurate it holds huge implications for the mobile communications market here in Korea, which is on the verge of a major transition to mobile handsets capable of surfing the web (all of it!) with a host of new services and content appearing in the process.  Not all of the services and content will be "made in Korea," but a flood of new applications should strengthen, not weaken, South Korea's mobile content, services and software sector.  If all works out well, 2012 should be very interesting, with gigabit per second internet service in major cities and much faster mobile broadband.

Digital Multimedia Broadcasting (DMB) Developments of Late

My wife and I just recently traded in our Kia Sportage and purchased a new Hyundai Tucson.  In the process, we chose several options, including the built-in navigation system.  The navigation options on the system are quite nice and highly programmable.   In addition, the system includes a DVD player, FM, and DMB (Digital Multimedia Broadcasting), among other things.  One day, a couple of weekends ago, I was checking out the system and when I pressed the DMB button on the left of the console and found myself watching a Korean drama via terrestrial DMB, it occurred to me what a convenient and natural option this was.  I imagined being caught in traffic, arriving at an appointment or simply being out in the mountains on a Fall afternoon, when it might be nice to watch a bit of television.  I also thought of the fact that most countries in the world don't yet enjoy the convenience of free DMB television, so this is an update on two earlier posts (the first here and the second here.)   Several things are happening in the DMB industry.
First, according to reports in Korea's electronics newspaper (전자신문), several of the terrestrial DMB broadcasting companies are starting to specialize, in an effort to attract a more targeted audience, and advertisers.  For example, U1 is specializing in online and offline sports, and Korea DMB was changing its name and plans a focus on the economy.
Second, also according to the Electronics Newspaper, three big mobile carriers in Korea are experimenting with two-way data broadcasting services using DMB.  Using such services, users can do search, shopping or communications while watching DMB programming.   This is similar to the sort of services that are incorporated in the IPTV offerings for which more than one million Koreans have subscribed to date.
Second, the export market for Korea's DMB technology, although in its infance, is still alive.  The technology is being used in such nations as Germany, China, Ghana, and France.
Like wireless broadband (WiBro), Korea's DMB technology faces competitors in the global market.  However, there may well be an important market niche for Korean technology.  This is a sector to watch closely.

Hangeul and Korea's Information Society

Tomorrow, it turns out, is the 563rd anniversary of the promulgation of Hangeul by King Sejong. An opinion piece in the Korea Times provides some interesting background, but I'd like to emphasize a bit more, in relation to the central focus of this blog.

• Because the Korean alphabet is so scientific and phonetic, it was an important factor in accelerating the uptake of computers, mobile phones and all sorts of digital electronic devices here.
• It is possible to type much faster on a hangeul computer keyboard than on a qwerty English keyboard--much faster! Just watch any reasonably skilled Korean typing and you'll see what I mean.
• Because Hangeul is alphabetic, it was conducive to the rapid development and growth of the graphics industry, which began back in the 1980's. Some of us remember when there were no Korean fonts, only calligraphy.
• Literacy is an essential requirement for the information society and Hangeul helped promote it in Korea. For years now, South Korea has had near-universal literacy.

On the occasion of Hangeul's 563rd anniversary, it is well to remember the above points. People from North America or Europe frequently lump the Korean alphabet in with Chinese and Japanese and assume that it is a pictographic writing system. To the contrary, it is alphabetic, scientific and an important factor in explaining the rapid digital development in Korea over the past three decades or so!

Korea's IT Service Sector vs. IT Manufacturing

In recent decades, South Korea has become an IT Powerhouse, based largely on the impressive strides it has made in ICT-related manufacturing.   We all know the main products --semiconductors, mobile handsets, LCD flat panel displays and digital televisions, along with parts and components for many of these products as well as fiber optic and wireless digital networks.
A new report by the Hyundai Research Institute warns that the sluggish development of South Korea's IT Service industry could hurt the country's overall IT competitiveness since it widens the gap between the service and manufacturing sectors.  Korea's IT Service industry expanded by an annual average of 7.1% from 2001 through 2008, while its IT manufacturing industry grew 9.5 percent in the same period.
An article published by Yonhap News also notes that the the IT service industry encompasses consulting, systems integration and management, and IT education.