Thu, May 25, 2006 - Page 11 News List

Koreans must innovate: iSuppli

STAYING ALIVE Samsung, LG.Philips and other firms will have to do more to remain ahead of rivals from Taiwan, China and elsewhere in the information-technology field

AP , SEOUL

South Korea is losing global market share in the liquid-crystal display (LCD) and flat-screen TV sectors, and must innovate to counter increased competition, a market research company said yesterday.

"It is across a fairly wide spectrum of IT product lines that Korea is suffering from competitiveness of other regions" such as Taiwan, China, Europe and North America, said Derek Lidow, president and CEO of iSuppli Corp, which compiles data on various technology industries.

"[South] Korea is battling on many fronts and has unfortunately been forced into a more defensive position. [South] Korea is being outspent and also outmarketed," he said.

Samsung Electronics Co and LG.Philips LCD Co are the world's top makers of LCDs, used in computer screens, cellphones and televisions.

But Lidow said that Taiwan replaced South Korea as the world's largest LCD maker late last year, and in the market for LCD TVs, South Korea has slipped to third place from second, now trailing Japan and "the combination of Taiwanese companies with Chinese production partners."

Lidow spoke to journalists just ahead of this year's Seoul Digital Forum, which brings together leading industry figures including Microsoft Corp CEO Steve Ballmer, Qualcomm Inc CEO Paul Jacobs, Renesas Technology Corp president Satoru Ito and Hwang Chang-gyu, head of Samsung Electronics Co's semiconductor business, over three days through tomorrow.

South Korea has also seen its market share gains in mobile phones slow, he said, last year being "effectively contained by a resurgence in European and North American competitiveness."

For example, the top two global brands last year, Nokia Corp of Finland and Motorola Inc of the US, sold almost US$500 million per handset platform, or major category of phone, he said.

South Korea's top players, Samsung and LG Electronics Inc, meanwhile, sold about US$100 million per platform.

Lidow said that South Korean companies had enjoyed a "remarkable" global emergence beginning in the late 1990s based on "strong investment and also operational efficiency."

What they need now, he said, was more innovation.

"To reverse this trend will require a strong dialogue between government and industry ... with a focus on how to create an environment of investment in riskier ideas across a broad spectrum of product areas," he said.

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