[Lee Jae-min] Korean frenzy over smartphones

The first digital revolution in Korea came with the wide penetration of broadband. Korea has been thought of as the most wired country in the world. The OECD has long been following the status Internet connections in its 34 member countries, and Korea has been steadily ranked first, with 97 percent households hooked up to a broadband Internet connection. The average for all 34 countries is 62 percent. This explains why Koreans are often frustrated by the slow and sporadic Internet connections overseas. 

Now the second digital revolution is in full gear. Statistics just released by the Korea Communications Commission, a government agency in charge of the telecommunications sector, describe the explosion of smartphone subscriptions in Korea. The number of smartphone users in Korea has exceeded 20 million. To paraphrase: four out of 10 Koreans and eight out of 10 economically active persons in Korea are currently using one of these electronic gadgets. More remarkable is the rate at which those subscriptions have increased: the 20 million mark has been reached in just 23 months since the first smartphone first introduced in the Korean market in November 2009. It was just earlier this year when the Wall Street Journal reported that the number of smartphone subscribers in Korea had passed 10 million. Nearly 40,000 to 50,000 people per day are jumping on this digital bandwagon. This is the fastest growth rate in the world at the moment.

The abrupt smartphone frenzy is also changing the way of life in Seoul. SNS and Kakao Talk have changed the way people communicate with each other, and there is immense potential for political mobilization, as seen in last week’s local government by-election. There is a virtual store inside the Seolleung subway station of the Green Line, where people can buy groceries by scanning the black-and-white QR codes with their smartphones. Mobile phone banking through smartphones has become increasingly common. Korea’s existing broadband Internet infrastructure has provided a platform for the fast diffusion of smartphones. Now the combination of broadband and smartphones has enabled people to be wired, literally all the time.

This fever also creates a big market. Take a look at commercials on TV or those before movies in the theater, and count how many of them are related to smartphones. New products feature faster loading and running with all sorts of different applications, catering to Korean consumers’ well-known desire for speed and delicacy. Faster, thinner and more innovative smartphones are now competing for consumers’ attention. They are now advertising phones with bendable screens. This must be a new area of business for the otherwise saturated wireless market.

As we are more wired, we are more detached from the people around us. In subway trains, the eyes of passengers are glued to the tiny screens of their smartphones: eye contact and conversations are reduced to an absolute minimum. Conferences and meetings have been reduced to mere physical congregations, while participants’ minds are elsewhere: in the middle of discussions and presentations, people are tweeting, blogging and exchanging text messages and e-mails from the smartphones. This is a device that enables us to multitask at any location 24 hours a day seven days a week. It has unchained people from the desk and office, but in a sense it also forces people to carry them all the time. So, more pressure in exchange for the convenience.

Smartphones have wrought great changes to Korea’s mobile IT industry. This tiny palm-held device builds up a new momentum of growth for this industry. The potential for growth is immense because of the device’s exploding demand in Korea and abroad. As shown by iPhones and iPads, sophistication of hardware is not sufficient to take advantage of the momentum of the new IT wave. Again, as shown by iPhones and iPads, software and contents are more important ingredients in the recipe of success in the global IT market.

At the same time, despite the current pace of fast diffusion, there are financially underprivileged households that cannot afford the pricey smartphones and monthly fees. The KCC also voices concern about the so-called “smartphone divide” where a certain group of people are left behind in this drastic change of communication tools. Ensuring these households’ access to more affordable smartphones would be equally important in planning a long-term smartphone policy at this juncture.

By Lee Jae-min

Lee Jae-min is a professor of law at the School of Law, Hanyang University, in Seoul. Formerly he practiced law as an associate attorney with Willkie Farr & Gallagher LLP. ― Ed.