20060326

Saving private Korea Inc - back to subsidies, but no way back

Better late than sorry. The MIC eventually allowed cellcos to subsidize handsets. Korea Inc can now boost DMB, WiBro and W-CDMA technologies at home. Bad news for SK Telecom's competitors*, good news for Samsung, LG & Co, who would have preferred this help much earlier for their international competitiveness**. Yet, note that debitel's DMB trials in Germany*** have just been confirmed, along with a nationwide coverage in 2007 (8 cities for the World Cup, 12 by the end of 2006).
The MIC set a few rules for subsidies (only 62% of subscribers can enjoy them now, and 18 to 24 month will be required between each favor)... with the notable exception of next gen handsets (DMB, W-CDMA, WiBro...). To avoid a loss of face, the Government intends to monitor the process even more closely than it does with real estate, thanks to a weird kind of reverse auction.

This Monday morning, March the 27th, each MNO will give its subsidy grid to the regulator and no change will be allowed untill April 27. You can give more but can never lower your level of subsidy.
Analysts expect a reasonable start (around KRW 100 k per handset - about $100), but all gloves are off... which might help those who'll purchase the brand new ring / wrist phones recently announced by manufacturers.

But the device of the week was presented by Samsung at their Mobile Solution Forum in Taipei. It's not a handset but the World's first SSD (Solid-State Drive) laptop : the 32 Gigabyte flash-chip drive is four times lighter than a 30 Gigabyte HDD, and the manufacturer expects the technology to snatch 30% of the laptop market with a $200 unit price by 2008 (the price is set**** at $500 right now).



* even if KTF will turn a few heads with KTF Technologies Inc's ultra-slim phone (7.9 millimeters - MP3 player - 1.3-megapixel camera - electronic dictionary with over 300,000 English words...).
** see "
Subsidies : boosting subscriptions of exports ?" (20051026).
*** see "CeBIT unnovations" (20060312)
**** I don't say "fixed" because Samsung joined Hynix in sending employees in jail for price-fixing in the semi-con sector (the $300M fine paid last year didn't protect the individuals working for the company).



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