Mobile in Korea

   According to iSuppli's report regarding mobile device market, the rate of smart phone among all kinds of handset is about 11% globally. However, the rate of smart phone in korea is less than 1%. Recently, Samsung Electronics launched a new model of smart phone in Korea. The smart phone (SCH-M620) is called "Blackjack" in US and about 1.2 mil units were sold in US. However, Samsung Electronics sold only 30 thousand units of Blackjack in Korea since last July. Smart phone is not popular handset type in korea. There are two reasons.



   First, usual korean people prefer to a small & slim handset. The above picture shows popular handsets in Korea. The thickness of popular handsets is less than 17mm. If the size of a handset is larger than the palm of users' hand, the model can not win popularity in Korea. As a result, usual smart phones are used by minority in Korea.

   Second, the distribution structure of mobile handsets is not usual compared with other countries'. There are two kinds of distribution model in other countries like Europe and US. Above all, handset manufacturers like Samsung Electronics, LG Electronics and Nokia have their own distribution channels. The manufacturers distribute various handsets in market by themselves. Users can buy any kinds of handsets and choose a mobile operator for service. The other model is that mobile operators control the hadnset distribution. Mobile operators have their own distribution channels and source handsets from manufacturers. Users can the handsets specialized for each mobile operator in the shop of mobile operator. However, there is only one distribution model in Korea. The distribution of all handsets are controlled by mobile operators. Manufacturer can not sell their handsets directly using their own distribution channels. As a result, korean mobile operators can push specific handset models to the market. Korean operators do not usually want that smart phone win popularity, because smart phone enables various data service including connection of direct web like Web'n Walk of T-Mobile. Korean operators operate their own mobile portal like Vodafon Live! and DoCoMo's i-mode and big revenue is created from contents of the portal. If users can connect to usual web sites with smart phone, the revenue from their own portal might be shrink. I think korean users lose the opportunity of handset because of each operator's strategy. Recently, usage of mobile VoIP with smart phone has been increased in Europe. Under such an environment, mobile VoIP can not be extended in Korea.

   However, I believe the environment will be changed. Korean operators are making an effort for HSDPA service. HSDPA handsets have a USIM card like SIM card of GSM handsets. The structure of the distribution model might resemble the stucture of GSM operators'. If the distribution model is changed and handset manufactures can sell handset by themselves, the adoption rate of smart phone might increase.

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