Thursday, January 28, 2010

Mobile Habits Changing As Smartphones Go Mass Market

Park Sung-ha is a self-admitted tech geek who never left home without his Samsung mobile phone, iPod Touch multimedia player and a separate Cowon multimedia device for playing videos. All this and a mini-laptop are in his bag. So it was perhaps inevitable that the 33-year-old Seoul office worker would thrust himself among a herd of gadget lovers flocking toward the massively hyped iPhone, the instant it was made available by local wireless carrier KT. After getting his hands on Apple's do-it-all smartphone, however, Park finds himself included in a much larger demographic than the so-called ``nerd community,'' with the average consumer developing a thirst for high-end phones. It's now easy to spot people fighting for room on a crowded commuter train to watch movies, browse the Web and play games on their ultra-cool devices. Others are found in coffee shops squinting at the screens to reply to e-mails or post Twitter updates. ``It seems like the 1990s all over again, when people were scrambling to buy personal computers and learn how to use them,'' Park said. ``I am seeing a lot of people around me, who previously didn't care much for mobile-phone features other than the shiny displays and digital multimedia broadcasting (DMB) television, pay hefty amounts in early terminations fees to switch to the iPhone or premium handsets. I never recall so much excitement among mobile users, although many of them will need some time to learn all the new activities.'' Although not even a month off the new calendar, it seems apparent that 2010 will finish as the year of the smartphone. Muted for years, these computer-like handheld devices are finally going mass market here ― KT sold nearly 300,000 iPhones just two months into its release and other stand-out products like Samsung's Omnia II and Research In Motion's (RIM) BlackBerry are being picked steadily off the shelves. And with mobile operators preparing to launch a slew of new smart handsets from next month, many of them powered by the Google-backed Android operating system, the local market appears to be on the cusp of a smartphone explosion, which will only be fueled as prices continue to fall. Of course, garnering the most attention is the potential release of the next new iPhone, which may or may not be called the iPhone 4G, a possibility for the second half of the year. According to the figures by the country's three mobile carriers ― SK Telecom, KT and LG Telecom ― the number of local smartphones users barely scratched 300,000 coming into last November, or perhaps, "B.I." (Before iPhone). Driven by the popularity of iPhone and Omnia II, the number of smartphone users has tripled in the past three months and is now estimated to approach 1 million. Industry watchers believe that the number of smartphone users will have a chance to hit the 4 million mark by the end of the year. SK Telecom, the biggest carrier, is aiming to sell 2 million smartphones in 2010, a number its bitter industry rival, KT, intends to match. LG Telecom, the smallest carrier, has also set a goal to sell around 700,000 smartphones this year. In a recent survey of about 1,300 employed adults by Job Korea (, a job information site, more than 80 percent of the respondents who didn't own a smartphone at the moment said they were planning to buy one. About 63 percent of the potential smartphone owners, who were able to give out multiple answers, said they were most attracted by the wealth of content enabled on the devices, while around 44 percent of them picked mobile Internet connectivity. Stressed Out Index Fingers While many mobile users are bracing to splurge on smartphones, others are lucky enough to be hired by companies who buy the devices for them. The tradeoff, of course, is that work will be brought home more frequently. Companies seem intrigued by the idea of their employees having one-stop devices that handle voice, e-mail, Web browsing, multimedia and simple office applications, which may contribute to more efficient workflow. Another advantage of smartphones is that they enable companies to design and use their own software, such as group e-mails and in-house communications programs, much like how computers are used. Kolon Group recently gave out ``Show Omnia'' handsets, similar devices to Omnia II, to its 8,000 employees, joining a growing line of organizations, including the Seoul Metropolitan Rapid Transit Corp., Samsung Securities and the Korea Meteorological Administration (KMA), who are equipping employees with smartphones. The idea seems to have come from Internet companies like NHN, Daum and KTH, which were the first to arm their employees with iPhones or Omnia-IIs as they compete to convert their desktop offerings for use onto mobile devices. There is a particular interest for the ``mobile office'' in the financial service sector too, with Shinhan Bank revealing that it is considering several smartphone models to hand out to its 15,000 employees. ``Our thought was that the companies that hop on the smartphone bus late will lose that much opportunity for innovation. We believe that the smartphones will help the company enhance productivity and help our employees maintain their edge in creativeness,'' said a Kolon official. The success of smartphones is critical for local mobile operators, who are milking their subscribers for more data revenue to make up for the decline in voice sales and get better returns on their massive third-generation (3G) investments. Smartphones, which provide larger margins than conventional phones, are also crucial for handset vendors like Samsung, which are being increasingly pressed to deliver products that can compete with the iPhones and BlackBerries of the world. Although Samsung is now the No. 2 handset vendor behind Nokia, with a worldwide share north of 20 percent, its share in the smartphone market struggles to touch 5 percent. According to market researcher Bernstein Research, Apple's iPhone accounted for only 8 percent of the handset industry's revenue through the first six months of 2009, but 32 percent of the sector's operating profit. Apple's size of its mobile industry profit was about a double of that of Samsung's, the research group said. Although the super-slim iPhone and Omnia II are aesthetically pleasing enough to qualify as fashion items, the key strength of these phones are their wireless Internet capabilities and the range of ``apps'' they support. This is the area where the iPhone has its clearest advantage over its competing products, with the wealth of programs available on Apple's App Store heralding the death of the hardware-oriented mobile-phone game. This also means that companies like Samsung and Motorola won't have a chance to produce a true ``iPhone killer'' before establishing competitive developer networks of their own, although the growing Android community might give them a fighting chance.

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