iPhone ushers in new era

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If you proudly use pricey Mac computers, constantly scan convoluted tweets on Twitter, and vigorously update your otherwise viciously boring life on your blog, you belong to a small, unfortunate group known as "early adopters" in Korea.

If that`s the case, you may have found it almost impossible to ignore the high-profile launch of the iPhone on the Korean market last week. More precisely, it`s a safe bet that you have already grabbed one for yourself, ditching your outdated smart phone that turned out to be dumb in every respect compared with the latest gizmo of U.S.-based Apple Inc.

Strangely enough, iPhone`s debut is stirring up the local mobile phone market at a far bigger and deeper scale than previously imagined. In the past week, major newspapers and online portals in Korea rushed to cover the long-awaited debut of the iPhone, producing an unprecedented amount of news articles for a topic that supposedly concerns only technology geeks.

For tech-savvy early adopters in Korea, the iPhone means much more than just a sleek-and-fashionable smart phone. They have long been victims of unfair market practices and monopolistic tricks by manufacturers and wireless carriers. Local mobile phone users have been forced to pay for the "crippled" mobile internet services at a premium.



Compared with other cell phone users outside of Korea, local subscribers were required to pay hefty, often devastating, data fees. For instance, a single ringtone may be priced at 500 won, but you are very likely to end up paying 3,000 won for downloading that file onto your phone over the mobile network. There are numerous episodes involving the unsuspecting users who have to cough up hundreds of dollars after surfing the internet and downloading some applications.

The obvious question is: Why not use the free Wi-Fi nework, instead of the expensive mobile network? Up until recently, there was no choice for Korean users. The majority of conventional mobile phones still come without a function to surf the Web via a public wireless network.

Just a few years ago, even the expensive smart phones manufactured Samsung Electronics Co. conspicuously lacked the unrestricted access function to Wi-Fi networks, bowing to the demand of Korean mobile carrier addicted to taking sizable profits from the highly controlled mobile internet network.

Samsung, one of the biggest handset makers in the world, has all the technologies it needs to equip its latest phones with a function that allows Korean users to access public internet network. But SK Telecom, KT and LG Telecom did not want their captive users to download ringtones and games off from the public network or from their PCs at home. All the accesses were blocked on purpose, and many of the functions available on the handsets made by Samsung and LG for foreign users were cut out when the same models were introduced on the Korean market.

How could Korean wireless carriers and handset makers maintain such unfair practices for so long? One reason is a set of telecommunications regulations that have prevented fair and square competition with foreign manufacturers. The iPhone is a case in point. Although Korea has prided itself on its omnipresent broadband and wireless network, the official debut of iPhone lags far behind other comparable countries - even China.

The government`s recent decision to clear the final regulatory hurdle for the iPhone`s launch is, therefore, a welcome move. And the result proves far more explosive than forecast. KT, the iPhone carrier here, is attracting new subscribers at a faster-than-expected pace, sending alarms to its rivals, SK Telecom and LG Telecom. Samsung Electronics is also scrambling to protect its home turf by accelerating the marketing of its new smart phone named "Omnia 2."

Although it has been less than a week since the formal launch, KT has signed up more than 65,000 iPhone users, many of whom routinely surf the Web, update their tweets and check their emails wirelessly - a user group whose heavy data usage leads to bigger revenue in the longer term.

SK Telecom, sensing a sudden change in tide, particularly concerning its long-time loyal subscribers, increased the subsidies for Samsung`s Omnia 2 model to stay competitive in the race. Lower prices, of course, are a boon for smart phone users whether the product in question is an iPhone or Ominia 2 (there`s no LG smart phone to speak of, at least for now), but it remains uncertain whether potential iPhone users will change their minds to sign up for Samsung`s smart phone that runs on Microsoft`s Windows Mobile 6.1 operating system.

An official at a KT sales outlet in Jongno told The Korea Herald yesterday that about 100 people a day are opening up new accounts with iPhones, and the pace of fresh orders is so fast that the staff members find it hard to catch up, aside from counless inquiry calls from those interested in the iPhone.

Foreign media also paid keen interest to the development in the Korean mobile market in connection with iPhone, suggesting a possible "paradigm shift." If Samsung and other handset makers begin to focus on the potential of software that can compete with Apple`s iTunes and appstore, iPhone`s debut in Korea will indeed bring about a sweeping change. If wireless carriers lower the mobile data fees further and provide affordable smart phones thanks to the introduction of the iPhone, it`s also highly positive impact for Korean users.

All of this, however, does not mean that Apple is doing perfectly well for Korean users. Although the U.S.-based IT giant has sold more than 500,000 iPods here, it does not have a single offline Applestore, which means it does not take the Korean market seriously yet. As there is no official offline presence, Apple`s customer services are weaker than domestic rivals. For early adopters in Korea, all eyes are now trained on whether Apple will use the current momentum of its iPhone launch to outsmart its Korean rivals, or stick to its secretive online-only presence.

(insight@heraldm.com)



By Yang Sung-jin