This is the fourth in a series of articles analyzing Apple's decision to delay the debut of iPhone 4 in Korea. — E.D.
By Kim Yoo-chul
Staff reporter
KT, the carrier that exclusively provides iPhones here, promised that the newest version of Apple's do-it-all smartphone, iPhone 4, will be available in Korea sometime in September.
The company, which is scurrying to calm customers' patience following Apple's unexpected decision to postpone the Korean launch, is struggling to adjust its smartphone strategies.
Samsung Electronics, the country's largest handset vendor, refusing to offer its best and newest phones to KT in an apparent backlash to the carrier's decision to partner with Apple.
KT is praying that the iPhone 4 arrives on Korean shores as early as possible, as it appears to be in danger of being rendered defenseless against its bitter industry rival, SK Telecom, which is flooding the market with devices powered by Google's Android operating system, including Samsung's Galaxy S.
All KT can offer is a watered down version of the iPhone 3GS and the Android-powered Nexus One, which Google seems eager to wash its hands of.
Although KT admits to being caught off guard by Steve Jobs' announcement that the Korean iPhone 4 debut has been temporarily shelved, Pyo Hyun-myung, the president of KT's mobile division, nonetheless guarantees that the debut of Apple's latest gadget will happen within September.
"You can trust us about iPhone 4's September debut in South Korea," he said in a message posted on his Twitter account, Sunday.
"We are continuing to talk with Apple, and currently, we are in the phase of finalizing some tests regarding reception and voice quality," he said.
Kim Yoon-jeong, a KT spokeswoman, claimed that there are no serious issues working against the September release.
KT's original plan was to have iPhone 4 by July, similar to Apple's partners in 17 other countries. The carrier will hold a news conference on July 27 to quell the fuss about the delayed iPhone 4 launch.
Apple has yet to explain why it has yet to submit its new device for radio approval, despite being a month and a half since Jobs unveiled it in a San Francisco news conference. Steve Park, Apple's local spokesman, didn't answer calls for comment.
Being essentially a one-trick iPhone pony, the delayed iPhone 4 debut is a matter of serious concern for KT. Between June 8 and July 21, KT stock prices decreased by 11.25 percent, while shares of SK Telecom gained, according to data from the Korea Exchange (KRX).
"Unless we find a way to be bolder in dealing with our issues in handsets, are troubles will only deepen," said another senior KT executive, who didn't want to be named.
KT is also increasingly worried about its deteriorating relationship with Samsung.
Several industry sources told The Korea Times that KT Chairman Lee Suk-chae is looking to personally meet some senior Samsung executives, including Samsung chief operating officer Lee Jae-yong, to seek a truce.
Although representatives from both KT and Samsung were coy about the possible meetings between Lee and Samsung leaders, KT admits it has been more aggressive lately on the negotiations table.
"There is no other way to put this; we are desperate," said another KT source.
Lee has been grabbing headlines for his verbal jabs at Samsung, which equally indicate frustration and desperation, and claim the "unfairness" of the vendor's decision to offer its highly-popular Galaxy S smartphones only through SK Telecom.
SK Telecom expects the sale of the Samsung Galaxy S to exceed 1 million units before the mid-September mainly thanks to massive marketing from Samsung to exploit the market for business users and provide the phones to major banks, financial service companies, media and news organizations, and government agencies.
As Galaxy S continues to draw positive reviews, KT fears the possibility of losing potential iPhone 4 customers as the wait for Apple’s new device continues.
"Steve Jobs' 'unapologetic apology' about the iPhone 4 reception problems, as well as the company's lack of efforts to reach out to Korean consumers, has clearly been a letdown for consumers here. Apple's devices still have their strengths in content and user interface, but it remains to be seen whether Korean consumers will continue to line up to buy them when they begin to realize that the product may be flawed," said an industry source.
"KT could be losing the smartphone battle by 1 million users by the end of the year, even should the iPhone 4 reach Korean shelves by September. The competition is toughening and the marketing wave seems to have shifted to Android phones," he said.
KT officials, although admitting that SK Telecom has a larger arsenal of weapons, insist that the iPhone 4 and the upcoming iPad tablet computers will combine to explode like a nuclear bomb.
Although KT trails SK Telecom in the mobile segment, with its rival controlling more than half of Korean wireless users, its broader coverage in Wi-Fi and other wireless Internet networks will provide it an important edge in the smartphone competition.
"Although KT is feeling the sense of urgency to improve its ties with Samsung, the turbulence will settle soon. KT is still performing better than its rivals in the average revenue per user (ARPU) for wireless data," said an industry analyst.