4th Wave Undercuts Korean Cell Phone Makers
By Kim Tae-gyu
Staff Reporter
The global cell phone industry is facing the arrival of a fourth wave characterized by the paradigm shift to software and user interface from hardware.
LG Economic Research Institute said Sunday that the new wave could corner Korean handset makers that are still struggling to attack low-end markets in the third wave.
``The fourth wave is arriving. Software and user interface will be key features, more important than hardware,'' said Jung Sung-cheon, a researcher at the LG institute. ``It will be cresting in two years.''
If Samsung Electronics and LG Electronics do not prepare for it, they will have big troubles, he warned. ``At risk is their market share,'' Jung said.
Currently, Samsung is the world's third-largest handset producer with a market share of 14.1 percent while LG is the No. 5 player with 6.4 percent.
Handset vendors are expected to stage a fierce battle for hegemony in the mobile operating system with the foremost players leading the way.
``We can also see the signal of the fourth wave at the success of cell phones equipped with new user interface including LG's touch-sensitive technology,'' he said.
According to Jung, the first wave started with the advent of digital mobile telephony systems in the mid-1990s such as global systems for mobile communications (GSM) or code division multiple access (CDMA). The second wave arrived in the early 2000s when handset makers were busy in incorporating as many applications and features as possible into a cell phone.
In the third wave, all the players went all-out to carve out the low-end markets including China and India by coming up with a set of dirt-cheap models.
``Samsung and LG were able to advance by riding on the second wave while having suffered setbacks after failing to respond to the third wave,'' Jung said.
``Nokia and Motorola are pulling out all the stops to prepare for the fourth wave. We are at crossroads and we need to move really fast to stay afloat,'' he said.
Indeed, both Samsung and LG chalked up impressive growth in the early 2000s through winning the hearts and minds of users with innovative premium models.
However, they began turning their attention to the cheap markets. In particular, Samsung recently knocked low-run markets in a full-fledged manner.
Nokia is the runaway leader in the world with one-third of the overall cell phone demand followed by the U.S.-based Motorola.