By Kim Tong-hyung
Staff Reporter
In a country where the use of mobile phones comes as naturally to people as breathing the air, Nokia, iPhone, Blackberry and other iconic phones are conspicuous by their absence.
However, with wireless operators looking for an edge amid the increasing competition for third-generation (3G) customers, and the government hinting on easing the regulatory requirements that have kept foreign handset makers at bay, Korean customers are now poised to entertain other options beyond just the latest offerings from Samsung and LG.
In a news conference last week, Taiwanese maker High Tech Computer Corp (HTC) announced the release of its ``Touch Dual'' handset in Korea, which will be available to subscribers of SK Telecom, the country's largest mobile carrier.
The phone is currently sold only to corporate customers, but SK Telecom will release another version of the handset for individual subscribers this week.
Touch Dual is among gadgets commonly described as ``smartphones,'' or handsets that provide capabilities beyond the typical mobile phone, such as Web browsing, e-mail, creating documents and other computer-like features.
Smartphones have thus far failed to generate a serious market interest here, with mobile-phone users frustrated over the limited choice in handsets and expensive data rates.
Ironically, it could also be argued that the country's advanced telecommunications infrastructure also contributed to the low demand for smartphones, as few bothered to check e-mails with their handsets when they could easily log-on to a computer network virtually anytime, anywhere.
However, among the country's tech-savvy customers, many use their phones to play video-games and watch television, growing accustomed to the idea of paying for more than just voice services, causing wireless operators to eye smartphones.
One optimistic SK Telecom executive predicted that the company will sell more than 100,000 Touch Dual units by the end of the year.
``Consumers today are demanding that their phones work more and more like the computers they use at their homes and offices, and Touch Dual is a product that could provide that,'' said Chung Dae-hyun, director of SK Telecom's sales division.
``The target of 100,000 units is not an outrageous goal. In today's market, there are popular handset models selling more than 10,000 per day,'' he said.
SK Telecom claims that the average customer will find Touch Dual affordable enough. The handset will retail at around 600,000 won ($572), but subsidies will allow customers to purchase it for around 300,000 won, SK Telecom officials said.
HTC is the first foreign handset maker to release its smartphone products in Korea and companies like Nokia, Research In Motion (RIM), the manufacturers of the Blackberry devices, and Apple, the creator of the ubiquitous iPhone, could follow.
SK Telecom is expected to release Blackberry handsets later this year, with RIM granted a license from the Korea Communications Commission (KCC) to sell their products to corporate customers.
KTF, the No. 2 wireless carrier which has been hot on the tails of SK Telecom recently, expects to make available two or three Nokia handsets by the end of the year and is in talks with Apple over the possible release of its iPhone 3G.
Foreign brands hitting the market could come as a refreshing change to Korean consumers who have been complaining that their freedom of choice had been compromised.
American handset maker Motorola, which provides its products to SK Telecom, and Japan's Casio, provider for LG Telecom, were the only foreign companies that were provided a piece of the pie in the Korean market.
It's no secret that the government and electronics makers have been working hard to make sure that Korean customers don't fall for foreign phones. It wasn't much of a difficult job in the past, with Korea choosing code-division multiple access (CDMA) technology as its wireless telephony standard, which differed from the global system for mobile communications (GSM) technology used in the larger part of the globe.
However, with CDMA and GSM technologies becoming compatible in the 3G mobile standard, foreign handset makers no longer have to make drastic changes to their products to make them work here.
The one remaining trade barrier for foreign handset makers is ``WIPI," or ``Wireless Internet Platform for Interoperability,'' a software standard that the government mandated in 2005 for all mobile-phone makers planning to deliver Internet access on handsets.
With Korea accounting for just 2 percent of the world's mobile-phone market, it was hard to convince the foreign handset makers to produce WIPI-enabled phones not usable elsewhere.
However, the KCC, the country's telecommunications regulator, is now considering scrapping the WIPI requirements, amid criticism that maintaining a fixed software standard would mean little when the global industry trend leans toward the adoption of open-source operating systems for wireless platforms.
The KCC has already shown flexibility when it allowed the sales of Blackberry phones earlier this year, although they will be available only to business users at first. HTC is rare that it agreed to have WIPI software on the Touch Dual handsets released to regular customers.
``There are arguments whether we should phase out the WIPI requirements or develop the software standard into an open-source style,'' said a KCC official who refused to be named.
``It is a hard decision to make, since Korean handset makers, wireless carriers and content providers have been developing their products under the WIPI platform in the past three years. We do acknowledge that WIPI contributed to the advancement of the country's IT industry,'' he said. More than 40 million of the handsets Koreans use today are WIPI-enabled, according to government estimates.
``We haven't decided anything concrete at the moment,'' said Shin Yong-sub, the director of KCC's broadcasting policy division.
``It is true that we are currently reevaluating our WIPI policy, including the arguments whether we should continue to mandate handset makers to use the software. The matter will be eventually discussed in our executive committee,'' he said.
It remains to be seen how far wireless carriers will push their commitment on smartphones. Although the operators would love to provide their customers with a larger range of handsets, they are also uneasy that the spread of these may eventually have a negative impact on their revenue-per-customer.
Touch Dual's release has created quite a buzz here, and the phone certainly has some stunning features, such as a 2.6-inch touch-screen display, a slide-out keyboard, Microsoft Office Mobile and Outlook Mobile for working on documents and e-mail, and a 2-megapixel camera for photos and video calls.
However, some consumers claim that the one feature the phone doesn't provide tells the truer version of the story.
``The biggest disappointment of Touch Dual is that it doesn't provide WIFI and a smartphone or PDA without wireless LAN is depressing,'' wrote a blogger in a popular tech Web site.
Wireless carriers shudder at the idea of smartphone users logging on to free WIFI networks, instead of using their expensive pay-per-packet mobile Internet services, not to mention making cheap or free VoIP (voice over Internet protocol) calls from hotspots.
Industry analysts point out that competition in the Korean telecommunications market is still much about the delivery of fancy hardware, with telecom operators still relying on voice sales after struggling to find a revenue model in wireless data services.
``Developing `killer applications,' such as location-based services and social-networking services, will be crucial for the spread of smartphones, and that may have more to do with Internet companies like NHN (operator of Naver, the country's most popular search engine) and SK Communications (the creator of the Cyworld Weblog services) than wireless telephony carriers,'' said Yoon Il-jae, a researcher at the Hana Institute of Finance.