Qualcomm Inc (QCOM)

[khemara_qc]

South Korea: High-tech hothouse (I)


Michael Kanellos
CNET News.com
June 24, 2004, 10:05 BST


The mobile revolution is a step ahead in South Korea, where cellphones are ubiquitous and sport many applications


South Korea has a singular asset when it comes to creating consumer products. It's called snooping.





With 13 million of the country's 48 million citizens living in the high-rise forests of this dense metropolis, people are constantly spying on what their neighbours or fellow subway commuters are buying. As a result, South Korea has become something of an open-air focus group for technology manufacturers, accelerating replacement cycles and a plethora of new product uses.


"If you leave home without your phone, you feel like you left an organ or a limb," said Moon Suh Park, vice president of Qualcomm Internet Services Korea. "I think the only untapped market is the kindergarten or first-grade segment."


The local embrace of technology along with an active national government, export-driven local industries, and extensive use of broadband are the key factors permitting the country to wedge its way toward the forefront of the digital revolution. While other national economies rose and fell with the personal computer industry, South Korea is shaping up as a technology powerhouse through consumer electronics.


Samsung has transformed itself from being a component supplier and contract manufacturer to a name-brand company in home electronics. Rivals LG Electronics and Pantech, which was formed from elements of Hyundai's electronics divisions, are expected to follow.


Beyond commerce, South Korea's techno-revolution has had profound social consequences on issues ranging from political and corporate corruption to school punishment. As evidenced by the popularity of the leading Web log service, Cyworld -- which counts about an eighth of the country's population as registered users -- online communication and free speech are growing despite a long history of controlled media throughout much of Asia.


The adoption of new technologies has been pushed further by a national broadband infrastructure that provided about 71 percent of the country with high-speed Internet access. That, in turn, has helped the expansion of such diverse digital phenomena as online gaming and futuristic networked homes that connect refrigerators, ovens and other household appliances to the Internet.


KT Telecom already has the largest Wi-Fi network in the world, with 13,000 public access points, or "hot spots." Won-Sic Hahn, assistant vice president at KT, said the company plans to double that number by the end of the year.


"Wireless for (South Korea) is the same as the space mission to the moon was for the US," independent analyst John Yunker said. "Everyone is behind it -- government, industry."


South Korea's surge in cutting-edge technology and branded products can be credited, ironically, to one of the worst domestic disasters in recent memory: the Asian financial meltdown. The 1997 crisis hurled the country into economic chaos, devaluing the stock market by 75 percent and raising unemployment to 6.8 percent.


What's more, computer and electronics manufacturers were faced with the emergence of China as a manufacturing powerhouse, where factory workers could be hired for $1 an hour. Russia and Japan have since become more competitive as well.


The situation was so serious that, even today, many South Koreans stiffen and speak in dire tones when the subject comes up in conversation. But the daunting odds served as a source of inspiration for the country, which has a long history of overcoming political and economic adversity.


It is not uncommon for ordinary citizens to save gold in South Korea, and many pulled the precious metal from underneath their mattresses to donate it to the government. Many in this fervently patriotic country cited the Netherlands, a European dynamo that has thrived despite its small size, as a role model to maintain some semblance of optimism.


South Korea then embarked on a brazenly ambitious project to create a massive broadband system. It would provide high-speed Internet connections throughout the country, creating new domestic markets for technology while creating a national testing ground for exports. The national network accounted for 13.5 percent of the country's economy during construction.

http://insight.zdnet.co.uk/hardware/emergingtech/0,39020439,39158502-3,00.htm