SKT: keeping it Hancool – Korean iPhone no go?


As I mentioned before, neither LG nor Samsung have a clue how to design mobile phones, but the ever fickle SKT are harbouring thoughts of cranking out Android products from either company rather than selling Apple’s iPhone. On the one hand, Android is a very good platform which I respect; it would make little sense for SKT to pass up the business opportunity afforded by the clever OS. But on the other hand, in serving an LG or Samsung Android, the telecom mogul will only further entrench itself in the quagmire of a stodgy Korean-only oligarchy.

But, it isn’t really about SKT or rival KT (who will bring the iPhone to market… sometime). In a recent Korea Times article, SKT’s CEO, Jung Man-won, makes several valid points including the fact that in order to carry the iPhone, a company has to share revenues with Apple. And due to its open-source mobile OS, Google’s stipend is much lower per Android device than competitor’s phones. But that doesn’t explain Korea’s cold-shoulder politics despite the iPhone’s overwhelming success in neighbouring markets.

Though cut off from the north by a difficult brother and surrounded on all other sides by the sea, South Korea is not an island – especially in its expanding online community. This nation is booming in the IT sector and in Seoul alone, Silicon Valley-esque ghettos rise and fall yearly. Its consumers are savvy, making researched decisions and while many choose Korean PMP’s such as Cowon and iRiver, the iPod touch is the best-selling all-in-one device in Korea despite carrying a 50% premium.

Still, SKT are falling into the acquiescent camp of companies who will not challenge the status quo. Simply put, electronic sales in Korea are not governed by a free-market economy. With fingers in every business including selling groceries and making cars, Samsung and LG will not let another player in unless Korean companies pay dearly.

For developers too, SKT’s decision to go Android is wishy-washy. Android will boom – there is no doubt about it. It is portable, cheap, and to cash-strapped software houses, a great first step. And, hedged into the security and fastidiousness of an open-source community, Android is a great way to fuel the spread of ideas. In spite of those advantages, SKT’s choice of Samsung and/or LG will only prolong one of the most insular handphone markets in the world which has led to the Korean market being strangle-holded by flashy, do-nothing phones. The Korean handphone market is in a rut.

In the end, SKT will keep things in its own back yard while playing the ambivalent sampler. While Android is a good place to start, diversifying a business is also important. Mr. Jung quotes dismal iPhone figures in China, but what he fails to mention is the gouging prices Chinese vendors charge in a country where wages are lower. Korea is not China nor Japan, nor is it the West. But while Samsung and SKT expound the merits of the open source Android, they conspire to lock up the home market, battening the hatches with partisan politics.

Mr. Jung’s equivoque,”Personally, I am doubting the iPhone’s success in Korea” says less about the the iPhone’s potential in the Korean market than it does about Korea’s aversion to change.

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