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Apple Bores a Big 'iHole' in Korea's Walled Garden
Cupertino's 'Jesus phone' shattered all Koreans' preconceptions of mobile Internet
Jean K. Min (jean)     Print Article 
Published 2009-04-14 12:16 (KST)   
Apple's iPod Touch, an iPhone without a phone
©2009 Jean K. Min
Kang Min-wook thought he was just doing the same usual stuff on his mobile phone: surfing the Web, playing RPG games and watching some racy adult videos as he would do on his personal computer. Not exactly the kind of desirable things that would make his father happy but then again typical behavior for a hormone-charged middle-school boy.

A month later he was faced with a shocking phone bill -- 3.7 million won or about US$3,000. The boy was too scared to face the consequence of his mobile diversion and tell his father the truth. He decided to finish his month-long pastime by killing himself. A very stiff punishment for enjoying a benign entertainment to say the least.

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In another instance, an unfortunate octogenarian lady happened to be hooked on playing an online card game on her mobile phone -- for the first time in her life. She played the game 10 hours a day every day before she had to face the sticker shock of a massive bill.

Such horror stories about naive mobile Internet users penalized with eye-popping phone bills are not uncommon today.

Alarmed at the unexpected turn of events, SK Telecom and other Korean mobile service providers capped the daily allowance of data packets per user, though belatedly, and introduced new fixed data plan. However, this series of scandalous news left Koreans gun shy about mobile Internet usage.

No wonder that the average Internet usage rate of Korean mobile subscribers remains at a meager 10 percent for years, despite the best efforts of local carriers. In contrast, a whopping 54 percent of Japanese users accessed the Internet from their phones in 2007, according to Video Research Interactive.

For an average Korean, mobile Internet has remained the exotic hobby of a few early adopters. There are a number of reasons for this: The screens of average handsets are too tiny for pain-free Web browsing, home-grown user interfaces are clunky and service providers built heavy walled-gardens around their poor content and charged ridiculously exorbitant prices.

The "Jesus phone" from the Cupertino, California company shattered all these preconceptions in a day. Apple's iPhone proved that sleek Web-browsing beyond any carefully groomed walled-garden is feasible and even enjoyable on a tiny screen if assisted by intuitive software, all without paying a dime to greedy telcos thanks to its Wi-Fi connectivity.

Officially no iPhone has yet to be registered to the network of Korean carriers and a series of recent negotiations between Apple and SK Telecom and KTF has reportedly bogged down due to their differences on a host of issues ranging from data bill sharing schemes, restriction of local wireless standards and more recently, the sharp depreciation of the Korean won.

It is estimated, however, that Apple has instead sold as many as 1 million iPod Touches -- an iPhone without a phone -- in Korea. Local carriers consider this a serious threat to their proprietary content sales model, as Touch owners are downloading tens of thousands of applications and content from Apple's App Store every day, bypassing their walled-garden via Wi-Fi loophole. Frisbee, Apple's official Korean reseller, is even touting a free Skype call feature for the iPod Touch (via Wi-Fi) to promote the sales in its flagship Myeong-dong store.

Despite the fact that no iPhone has yet to find a single Korean owner, its looming presence is felt keenly across the local wireless industry. Samsung and LG launched a series of touch screen phones that mimic iPhone's haptic user interface and full browsing features. With the unveiling of Skype for iPhone/iPod Touch and a suite of other VoIP applications, iPhone is now breaking into the home turf of telcos, their mainstay and cash cow. A big "iHole" is now being bored finally in the walled-garden of Korean telcos.

"The iPod Touch is increasing its share in the local MP3 player market rapidly, reshuffling the Korean mobile content sector on the way," an executive of a Korean handset manufacturer noted. "Carriers will need to be prepared to compete with Apple's App Store even if the iPhone is never launched here."

SK Telecom announced yesterday that they would launch their own Korean app store soon and allow submitted applications to work on any phone or any carrier, as a rebuke to the closed architecture of Apple App Store.

Industry observers, however, are skeptical if Korean telcos are prepared to embrace their own app store any time soon, which will inevitably wither their lucrative data packet business.

The lesson we have learned from combining computers, broadband and Internet in 1990s is that the Web blossomed when each player did their own role very well without spilling over other's turf. Today's phones are morphing into computers of 10 years ago and the Web is waiting for the day to flex its muscle on the screens of smart phones.

One missing link in this mobile triple play is the telcos. The current problems we see in the Korean mobile echo sphere are happening because they don't want to remain as an uncluttered wireless broadband pipe and try to be everything, delaying the mobile revolution on the way.

History teaches us, however, that for every wall they built, people always found a loophole -- in this case a big "iHole."

*For more musing on Korean tech issues and memosphere please visit my blog; Planet Size Brain (link: http://planetsizebrain.tistory.com)
©2009 OhmyNews

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