Wednesday, September 23, 2009

iPhone in Korea

The iPhone has been approved for sale in Korea by the local operators. KT is known to be interested, while SK and LG are not clear.

The WSJ account makes it sound like a temporary suspension of protectionist barriers to protect Samsung and LG:

[In allowing the sale of the iPhone,] The Korea Communications Commission made an exception to a rule that requires cellphones sold in the country to use domestic technology for location-based services such as GPS. The commission's action comes after months of consumer pressure. South Korea has long stood out as one of the few technically advanced countries that doesn't allow the iPhone.

The iPhone is likely to shake up price competition for cellphones in South Korea. The market is dominated by domestic producers Samsung Electronics Co. and LG Electronics Co. Both companies typically report that average prices for phones sold in South Korea are about double the average prices they get outside the country.

South Korea's telecom regulators have long used technical rules to protect its domestic industry, which now has some of the world's most advanced manufacturers and service providers.
In general, Korea continues to use the protectionist measures that Japan was forced to abandon decades ago when it achieved per capita GDP parity with the West.

Now that they’re #2 and #3 in the world, however, it doesn’t seem as though the Korean mobile phone vendors need any more protection. Or will the trade barriers remain in place until one of them (presumably Samsung) passes Nokia? Think of the lesson that would teach the Chinese about telecommunications trade barriers.

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