Henry Yeh, of Brilliant Rise, explains how Android is transforming a traditionally closed market
Korea – like Japan – has always been considered unique in the world of telecom. Its operators control the market tightly and provide services that can be highly innovative, yet also very specific to the Korean consumer.
So traditionally Korea has been seen as also almost impenetrable by Western mobile forces.
Much of the reason for this was technical. In April 2005, the Korean government mandated that all handsets should embed a Korean specific java virtual machine called WIPI (Wireless Internet Platform for Interoperability).
The thinking was that standardisation would speed the development of the content market.
It worked. Korea is successful and advanced in mobile value added services.
But the strategy also had a downside. The WIPI mandate also prevented Korean companies from fully exporting their growing expertise around the world.
So the drive towards openness had to come.
In April 2009, five years after its introduction, WIPI was scrapped. Suddenly, the market was open to iPhone, Android, Nokia and the rest. Would they take full advantage?
The answer is a resounding yes. Korea’s second largest operator, KT has sold more than 400,000 iPhone in 4 months. For a subscriber base of 13 million, that is extremely successful. Even in Japan, Apple’s device has been a breakout success for Softbank.
Android is looking equally promising. SK Telecom, Korea’s largest operator, launched Motorola’s Motoroi Android phone to much fanfare in February. And next month, Samsung will be launching its flagship Samsung Galaxy with all its attendant marketing might.
SKT has committed to launch at least 13 Android phones this year and is expecting 20 per cent of its subscriber base to be using the Google OS within 18 months.
Meanwhile KT Telecom will be launching free Android phones with set calling and data plans by 3rd quarter this year.
Content providers are getting quite excited about all this. Korea has traditionally have been a top five revenue generating market for mobile games, with a top WIPI game generating between US$1 million and $5 million on a monthly basis.
I believe iPhone and Android will replace this market, and also bring in older gamers than the teenagers who use WIPI.
Since these users usually have higher disposable income, the projected ARPU generated should be higher.
In addition, these older users tend to be better educated, travelled and exposed to foreign content, they would mostly likely purchase non-Korean games and apps as proven by KT’s iPhone success.
So, the opportunity for foreign games and apps to enter Korea has never been better.
However, foreign developers and publishers will still need a local Korean publisher to distribute because the National Game Rating Board specifies that only local firms can apply for games certifications.
This is why SKT has also created an Android unit to protect IPs and help all parties generate revenue.
Brilliant Rise Korea is one of the largest Android and iPhone publishers in Korea, and can help overseas firms find out more.
Henry T Yeh