As one of the most tech-savvy countries in the world, South Korea is the focus of many foreign companies’ attempts to sell more smartphones, but it is proving to be a difficult market to conquer, one with many die-hard fans of local brands.
One company that is reassessing its strategy in South Korea is Taiwanese smartphone vendor HTC Corp (宏達電).
The Taoyuan-based manufacturer in July announced that it had decided to close its South Korea office to streamline its operations and improve efficiency.
An HTC official recently said that the company had faced some difficulties during its negotiations with South Korea’s telecoms operators.
Although these carriers say publicly that they are happy to work with any handset maker, they often express concern about whether foreign products are good enough, the official said.
“It’s not enough to be just as good as South Korean firms’ products ... You need to have superior brands and products so that the carriers there would be willing to sell them,” said the official, who spoke on condition of anonymity.
That means foreign brands need to introduce their flagship smartphones with cutting-edge technology or with hardware specifications that are better than industry standard.
Furthermore, South Korean operators also want foreign companies to spend heavily on local advertising for their smartphones and to give promotional gifts to consumers, expectations that are hard for foreign brands to meet, the official said.
“You can always enter the market, but eventually, you will find that you cannot play the game for a long time,” the official said.
In the first quarter of this year, non-South Korean smartphones accounted for only 3.4 percent of mobile phone sales in South Korea, with Apple Inc’s market share dropping sharply to 2 percent, research firm Gartner Inc said. That was still higher than HTC’s market share of 0.7 percent, Google Inc-owned Motorola Mobility Holdings Inc’s share of 0.4 percent and Japan’s Sony Corp’s share at 0.3 percent, Gartner said.
However, in the first quarter of 2010, Apple accounted for as much as 23 percent of South Korea’s mobile phone sales after the country started selling the iPhone 3GS in November 2009, the researcher said.
The sharp drop in Apple’s market share came as consumer interest shifted to South Korean devices with larger screens, long-term evolution (LTE) super-fast wireless connectivity and shorter product cycles, according to a recent study by US-based tech news Web site Engadget.
Apple’s iPhones have had the same screen size of 3.5 inches for years until it started using a 4-inch display in its iPhone 5 this year.
Meanwhile, South Korea-based Samsung Electronics Co overtook Apple as the world’s top smartphone vendor in the third quarter of last year thanks to the hot sales of its 4.7-inch flagship model, the Galaxy S II, which was unveiled in February last year, research firm Strategy Analytics said.
Samsung had grabbed a dominant 70 percent share of South Korea’s smartphone market by the end of July this year — two months after the launch of its newest 4.8-inch Galaxy S III — South Korea’s MK News Web site reported.
“The [South] Korean market is especially difficult because of the dominance of not just Samsung, but other local players — LG Electronics Inc, and Pantech Co,” Ovum analyst Mark Ranson was quoted as saying by The Register, a British technology news Web site.
“Korean players are even more dominant in the local LTE smartphone market,” he said.
Seoul-based Gartner analyst C.G. Lee told The Register Web site that this local dominance in the LTE space is because there is no standard frequency band between countries.
“Without economies of scale, foreign vendors also find it difficult to survive in a communications market where huge marketing dollars are needed,” Lee said.
Despite their low market share, foreign brands have viewed South Korea as a market they must tap. That is because of the high percentage of South Koreans using smartphones.
The number of smartphone users in South Korea as of August surpassed 30 million, which equates to roughly six out of every 10 people, according to a study in late August by SK Telecom and other telecommunications companies.
The results also suggested that the number of smartphone users is increasing by an average of between 10,000 and 15,000 people each day.
A study conducted in late June by the Korea Communications Commissions (KCC) found that among the 53 million people using mobile phones in South Korea as of June, about 28.8 million, or 58.5 percent, were using smartphones.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion