It seems like Apple has succeeded where others have failed – it has opened up the market in Korea for foreign handset vendors. And it has done so singlehandedly.
Before the iPhone, most of the Korean handset market has been ruled by local vendors. The service providers in Korea had their own set of special specifications, usually written in Korean, making it harder for foreigners to participate in the game.
One success story of a foreign company in Korea (and the only, I think) is Motorola – they have been selling phones in Korea for a long time now, and the reason for it is simple – they have CDMA phones, which work well in Korea. The way they penetrated the market is by acquiring a local CDMA phone vendor to use as a kind of an OEM for their phones.
Then Came The iPhone
Two things have changed all this:
- The migration to 3G (and WCDMA). This made Korea a universal environment where vendors could sell the same phones they are successfully selling in Europe – there is no need for CDMA anymore.
- The iPhone
Instead of having operators push the handsets to their customers, customers started asking for a specific handset – the iPhone. The agenda shifted from “which operator am I going to choose” to “which phone I want” – not the best of times to be a service provider.
iPhone became so popular in the Korean market (well, everywhere, but specifically in the Korean market), it even managed to break a local FCC regulation that mandated every phone to install a Korean specific java virtual machine called WIPI. WIPI was supposed to create a single environment running on any phone on any network in Korea. It also created a barrier for multinational vendors like Nokia who couldn’t manage special versions with WIPI for a relatively small market.
What WIPI has done was to create a safe haven for the Korean vendors, where they had the confidence that they didn’t have to compete with global players. This, in turn, made the Korean vendors fall behind competition – why do you need to bother and innovate if the market is closed to competition?
And Here’s the Android…
Back to the iPhone – once the iPhone hit the market, it simply opened the way to others into the Korean market. Which others? The Android, of course.
While both Samsung and LG are already rolling out Android devices (I guess mainly to play the catch-up game with the iPhone), there are other Android devices that can now find their way into Korea as well.
If you’re interested in statistics on this one, I suggest Alex Tsang’s post on Android in Korea over at the GIPS blog.