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South Korea: Commercial and Social Mobile Applications
Overview
South Korea is one of the few countries to have one of the most advanced mobile cultures in the world. It is considered to be one of the leaders in 3G mobile technology (see S,Korea: Mobile Landscape) as well as High Speed Downlink Packet Access (HSDPA) technology which possesses three to four more times the speed of 3G (Taylor, 2006). It has also been observed that South Koreans spend most of their time consuming digital media on their mobile phones whenever possible in Seoul (De Waele, 2008).
With the introduction of Wibro (wireless broadband) as part of Korea Telecom's vision for South Korea's capital, Seoul, to be highly connected with many "super-powerful wireless hotspots" (Taylor, 2006), mobile wireless internet in South Korea is getting increasingly popular among wireless internet users - making up 46.2% of the current wireless internet users.
Furthermore, the introduction in South Korea of a new generation of mobile phones that are packed with more features, higher speed and greater storage capacity has also played a large role in making internet connections using mobile phones easier, more accessible and more popular especially with users in the younger generations. With regards to accessing wireless internet using mobile phones, most of the accesses are being made by those in the younger age group, especially those in their twenties and those between the ages of 12 to 19 years. (Also see S.Korea: Social Media)
1. Receiving and Sending Real-Time Updates
1.1 Cyworld.com
The most popular social networking site in South Korea, Cyworld (similar to U.S. social networking sites such as Facebook or MySpace), does not only have the ability to allow users to access the social networking site via mobile phones, it also functions as a way for users to send and receive text updates to and from their friends. For example, using a camera mobile phone, users can take a photograph of what they are eating for lunch, post it to their site, and send a text message directing friends to their latest update (Kanellos, 2006).
2. Social Networking
Like social networking sites on the internet that are accessible via personal computers, and similar to many countries with wireless mobile connectivity, there are several mobile phone applications that enable users to connect to their peers and the world from the palm of their hands. This is especially true in South Korea.
2.1 Typical Use of a Mobile Phone
Mobile phones in South Korea play a role in the extension of a user's life. This is especially true with South Korea's "Thumb Generation," the twenty and thirty-somethings who grew up with game controllers and cell phones glued to their hands. A 21-yearold Korea University undergraduate, Park Hyun-A, claims that "each day she waves (her Samsung phone) over a reader at a turnstile in the train station to pay her fare" before "she flips open the screen and rotates it 90 degrees to watch satellite TV" and flips through the pages of an e-book on the same screen. Other than that, she "sends an average of 66 text messages a day, snaps pictures of cute guys and sends them to friends, and plays an online game in which she runs a virtual fruit store". Her involvement with mobile technology is so great that, like many other mobile phone users of her age, she can hardly think of her life without her handset (The Future of Tech, 2006).
2.2 Examples of social media applications that are well-integrated and well-received into mobile phones in South Korea.
3. Mobile Payments
The partnership between South Korea's largest bank, Kookmin Bank, and the third largest mobile carrier LG Telecom has led to the launching of BankOn - South Korea's first IC chip-based mobile banking service in 2003. Customers are now able to make transactions using their mobile device as a substitute to ATM or transit cards. This is an improvement to the previous method of mobile banking lauched in 2002 by the two biggest mobile carriers in South Korea - SKTelecom and KTF - where customers make their mobile payments using infrared technology. The success of BankOn has significantly increased LG Telecom's market share and caught on with other mobile carriers who offer similar mobile banking services using IC chips, such as MBank by SKTelecom and KBank by KTF (Bradford & Hayashi, 2007).
In 2007, SKTelecom introduced a new method of mobile payment service in South Korea. Depending on the mobile devide model, consumers are able to download credit card applications over the air to a SIM card. Consumers are also able to download mobile banking and public transportation applications onto the same IC chip. KTF and LG Telecom would most likely follow suit (Bradford & Hayashi, 2007).
4. Mobile TV
About
DMB, the mobile service developed in South Korea, is the world’s first official mobile TV service.
Issues
Technological limitations
Despite the good functions and programs available, the mobile TV is lacking in interactivity unlike many other mobile applications available in South Korea. It is said that DMB is just another medium for portable basic cable television. This is because "there aren’t any shows that are specific to the mobile platform, and it’s not tailored to the individual". However, DMB notification services are available in the Korean language. The services include real time text alerts about " live programming reminders to friends in phone contacts and DVR functionality" (DaPonte, 2008).
Unprofitable Adveristing based Revenue Model
Terrestrial DMB (T-DMB) has recently run into problems as it struggles to survive on a business model based on advertising, since its content is provided free for viewers.This comes despite the growing base of T-DMB viewers which is catching up with the number of cable TV viewers. Other factors apart from the poor revenue model are content based - content is largely restreamed from existing large players (the terrestrial broadcasters), with no new content for viewers. While unique content has been submitted from independent producers, they lack resources to compete with the larger players (Chung,2009).
Governmental and Business Developments
The Korea Trade-Investment Promotion Agency has included DMB along with WiBro and IPTV to be exported to foreign markets. Commercial DMB services will be launched in European countries such as France, Norway and Italy while the focus is on adoption in SE Asia. (Kim, 2009)
On another note, Walt Disney recently struck a deal with Korea's SK Telecom to provide full-length video-on-demand for mobile. This is a first for any country outside of North America. The content available will include full length movies and TV series for 2G and 3G subscribers (Eaton, 2009). It will be interesting to watch how this plays out, as this situation is somewhat different from the Youtube v.s Hulu debate going on in the West, since all the content is produced by industry players, and is not a competition between user generated content and professional content. However, there are several underlying similarities, the most pressing issue being a lack of a proper revenue model to truly monetize the mobile/online TV benefits.
5. Business Applications using Mobile Phone
With mobile phones achieving high popularity in South Korea, many businesses and companies have taken advantage of the mobile phone as a platform to disseminate information, monetize services, develop new sources of revenue as well as a tool to generate awareness and interest, with the intention to translate these into sales.
5.1. Mobile Advertisements
Mobile advertising enables companies to have highly targeted marketing campaigns aimed at specific market segments of interest. New technologies in South Korea that allow high speed internet access over 3G and HSPDA on new generation and high-end mobile handsets have expanded the base for mobile advertising, along with new and innovative advertising methods which range from mobile coupons, ringtone advertisements, mobile search, games to others.
In 2006, the size of the online advertising market in Korea was $850 million, which counts for 12% of the entire Korean advertising market. Under this advertising market segment, $55 million came from the mobile advertising market. Compared with internet advertising, the size of the mobile advertising market is not as big but, it has been fast increasing its market size over the past few years.
Worldwide, Japan and the Western Europe are well-known for their huge mobile advertising market. In the case of Europe, currently not many mobile phone users have multi-functional 3G mobile phones providing various multi-media functions such as MMS (Multi-media Messaging Service). Therefore, the types of mobile advertising has been confined to SMS and WAP which are based on simple text. In terms of the mobile advertising technology, Korea is one step ahead of Europe and at a similar stage as Japan is currently.
The most common types of mobile advertising are as listed below:
1) Basic SMS advertising
2) Disemination of ringtones and videos through MMS, which attract customers into accessing the company’s website
3) Proximity advertising through the disemination of promotional information via MMS, once a user enters a certain geographical boundary (for instance, near some stores)
Below are some examples of product promotions through advertising on mobile phones that companies have been doing by tapping into South Koreans' mobile phone usage.
5.2. Issues
As mobile phones are a tool that most South Koreans, and especially the younger generations, are highly involved in, mobile phones are considered very personal. According to studies, people will notice that their cell phone is missing within an hour of losing it, compared to a day or more it takes for people to realise the same about their missing credit cards and wallets (The Future of Tech, 2006). As a result, as with any other mobile advertising application, consistently pushing out advertisements and product promotions can be considered obstructive as well as invasive of the users' privacy. Advertisers should not only rethink their business models to factor in user privacy, but also provide users the option to opt out of promotions targeted for release on mobile devices.
6. Feeds from related articles on S.Korea: Social Mobile Applications
7. References:
8. External Links:
South Korea is one of the few countries to have one of the most advanced mobile cultures in the world. It is considered to be one of the leaders in 3G mobile technology (see S,Korea: Mobile Landscape) as well as High Speed Downlink Packet Access (HSDPA) technology which possesses three to four more times the speed of 3G (Taylor, 2006). It has also been observed that South Koreans spend most of their time consuming digital media on their mobile phones whenever possible in Seoul (De Waele, 2008).
With the introduction of Wibro (wireless broadband) as part of Korea Telecom's vision for South Korea's capital, Seoul, to be highly connected with many "super-powerful wireless hotspots" (Taylor, 2006), mobile wireless internet in South Korea is getting increasingly popular among wireless internet users - making up 46.2% of the current wireless internet users.
Furthermore, the introduction in South Korea of a new generation of mobile phones that are packed with more features, higher speed and greater storage capacity has also played a large role in making internet connections using mobile phones easier, more accessible and more popular especially with users in the younger generations. With regards to accessing wireless internet using mobile phones, most of the accesses are being made by those in the younger age group, especially those in their twenties and those between the ages of 12 to 19 years. (Also see S.Korea: Social Media)
In this section:
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1. Receiving and Sending Real-Time Updates
1.1 Cyworld.com
The most popular social networking site in South Korea, Cyworld (similar to U.S. social networking sites such as Facebook or MySpace), does not only have the ability to allow users to access the social networking site via mobile phones, it also functions as a way for users to send and receive text updates to and from their friends. For example, using a camera mobile phone, users can take a photograph of what they are eating for lunch, post it to their site, and send a text message directing friends to their latest update (Kanellos, 2006).
2. Social Networking
Like social networking sites on the internet that are accessible via personal computers, and similar to many countries with wireless mobile connectivity, there are several mobile phone applications that enable users to connect to their peers and the world from the palm of their hands. This is especially true in South Korea.
2.1 Typical Use of a Mobile Phone
Mobile phones in South Korea play a role in the extension of a user's life. This is especially true with South Korea's "Thumb Generation," the twenty and thirty-somethings who grew up with game controllers and cell phones glued to their hands. A 21-yearold Korea University undergraduate, Park Hyun-A, claims that "each day she waves (her Samsung phone) over a reader at a turnstile in the train station to pay her fare" before "she flips open the screen and rotates it 90 degrees to watch satellite TV" and flips through the pages of an e-book on the same screen. Other than that, she "sends an average of 66 text messages a day, snaps pictures of cute guys and sends them to friends, and plays an online game in which she runs a virtual fruit store". Her involvement with mobile technology is so great that, like many other mobile phone users of her age, she can hardly think of her life without her handset (The Future of Tech, 2006).
2.2.1 Parts 1-3: A Day in The Life of a Mobilephone in Seoul (iCheil, 2008)
The videos below best summarise the general and typical usage of mobile phones in Seoul, which is increasingly becoming a "modern digital metropolis". The videos shows how users, especially those of the younger generation, are making mobile phones an integral a part of their life and as a tool essential to their social circles by "utilising a wide spectrum of mobile services from video calls, SMS, MMS, vlogging/blogging, internet, mobile TV broadcast, digital multi-media broadcast, m (mobile)-commerce, m-banking, m-mags, m-movies and other dynamic multi-sensory social content" (De Waele, 2008).
2.2 Examples of social media applications that are well-integrated and well-received into mobile phones in South Korea.
2.2.1 Cyworld.com
The most popular social networking site in South Korea, Cyworld, besides functioning as a tool to send and receive text updates to and from the site, also functions as a social networking tool which enables users to not just keep in contact but also engage in online activities via social applications. In fact, more than 3 million Koreans regularly use their mobile phones to log on to the giant Cyworld social networking site to make use of the social tools available to them.
2.2.2. Polygraph - Handy Truster Emotion Reader
A £35 pocket-sized mobile lie detector which can be plugged into telephones and mobile phones has been well-received. Its South Korean makers say that it could see through eight out of 10 lies and is increasingly used by South Korean girls to test if their boyfriends are telling them the truth about their whereabouts (De Waele, 2008).
Using a technology developed for the Israeli military and tested on Al Gore and George W. Bush in a presidential debate, the detector is claimed to be more accurate than polygraph tests. While polygraphs analyse physiological reactions such as changes in pulse rate, the Handy Truster works on the principle that when people lie, the blood flow to their vocal cords is restricted by stress. However, the gadget is unlikely to work with compulsive liars as before it can detect falsehoods, it must be calibrated against the sound of a truthful statement (Uhlig, 2001).
3. Mobile Payments
The partnership between South Korea's largest bank, Kookmin Bank, and the third largest mobile carrier LG Telecom has led to the launching of BankOn - South Korea's first IC chip-based mobile banking service in 2003. Customers are now able to make transactions using their mobile device as a substitute to ATM or transit cards. This is an improvement to the previous method of mobile banking lauched in 2002 by the two biggest mobile carriers in South Korea - SKTelecom and KTF - where customers make their mobile payments using infrared technology. The success of BankOn has significantly increased LG Telecom's market share and caught on with other mobile carriers who offer similar mobile banking services using IC chips, such as MBank by SKTelecom and KBank by KTF (Bradford & Hayashi, 2007).
In 2007, SKTelecom introduced a new method of mobile payment service in South Korea. Depending on the mobile devide model, consumers are able to download credit card applications over the air to a SIM card. Consumers are also able to download mobile banking and public transportation applications onto the same IC chip. KTF and LG Telecom would most likely follow suit (Bradford & Hayashi, 2007).
4. Mobile TV
About
DMB, the mobile service developed in South Korea, is the world’s first official mobile TV service.
- officially launched in May 2005,
- based on the Eureka 147 Digital Audio Broadcasting (DAB) standard
- has some similarities with the main competing mobile TV standard, DVB-H.
Issues
Technological limitations
Despite the good functions and programs available, the mobile TV is lacking in interactivity unlike many other mobile applications available in South Korea. It is said that DMB is just another medium for portable basic cable television. This is because "there aren’t any shows that are specific to the mobile platform, and it’s not tailored to the individual". However, DMB notification services are available in the Korean language. The services include real time text alerts about " live programming reminders to friends in phone contacts and DVR functionality" (DaPonte, 2008).
Unprofitable Adveristing based Revenue Model
Terrestrial DMB (T-DMB) has recently run into problems as it struggles to survive on a business model based on advertising, since its content is provided free for viewers.This comes despite the growing base of T-DMB viewers which is catching up with the number of cable TV viewers. Other factors apart from the poor revenue model are content based - content is largely restreamed from existing large players (the terrestrial broadcasters), with no new content for viewers. While unique content has been submitted from independent producers, they lack resources to compete with the larger players (Chung,2009).
Governmental and Business Developments
The Korea Trade-Investment Promotion Agency has included DMB along with WiBro and IPTV to be exported to foreign markets. Commercial DMB services will be launched in European countries such as France, Norway and Italy while the focus is on adoption in SE Asia. (Kim, 2009)
On another note, Walt Disney recently struck a deal with Korea's SK Telecom to provide full-length video-on-demand for mobile. This is a first for any country outside of North America. The content available will include full length movies and TV series for 2G and 3G subscribers (Eaton, 2009). It will be interesting to watch how this plays out, as this situation is somewhat different from the Youtube v.s Hulu debate going on in the West, since all the content is produced by industry players, and is not a competition between user generated content and professional content. However, there are several underlying similarities, the most pressing issue being a lack of a proper revenue model to truly monetize the mobile/online TV benefits.
5. Business Applications using Mobile Phone
With mobile phones achieving high popularity in South Korea, many businesses and companies have taken advantage of the mobile phone as a platform to disseminate information, monetize services, develop new sources of revenue as well as a tool to generate awareness and interest, with the intention to translate these into sales.
5.1. Mobile Advertisements
Mobile advertising enables companies to have highly targeted marketing campaigns aimed at specific market segments of interest. New technologies in South Korea that allow high speed internet access over 3G and HSPDA on new generation and high-end mobile handsets have expanded the base for mobile advertising, along with new and innovative advertising methods which range from mobile coupons, ringtone advertisements, mobile search, games to others.
In 2006, the size of the online advertising market in Korea was $850 million, which counts for 12% of the entire Korean advertising market. Under this advertising market segment, $55 million came from the mobile advertising market. Compared with internet advertising, the size of the mobile advertising market is not as big but, it has been fast increasing its market size over the past few years.
Worldwide, Japan and the Western Europe are well-known for their huge mobile advertising market. In the case of Europe, currently not many mobile phone users have multi-functional 3G mobile phones providing various multi-media functions such as MMS (Multi-media Messaging Service). Therefore, the types of mobile advertising has been confined to SMS and WAP which are based on simple text. In terms of the mobile advertising technology, Korea is one step ahead of Europe and at a similar stage as Japan is currently.
The most common types of mobile advertising are as listed below:
1) Basic SMS advertising
2) Disemination of ringtones and videos through MMS, which attract customers into accessing the company’s website
3) Proximity advertising through the disemination of promotional information via MMS, once a user enters a certain geographical boundary (for instance, near some stores)
Below are some examples of product promotions through advertising on mobile phones that companies have been doing by tapping into South Koreans' mobile phone usage.
1) Hyun-Dai Department Store, SK2 promotion
One very popular promotional gimmick makes use of mobile phones in Korea by sending out e-coupons through MMS. Companies send e-coupons which offer discounts for their products or product samples to potential customers who will then pay a visit to the store and purchase the product at the discounted price or collect the samples.
The department store gathered data of people who never purchased the SK2 product previously but had a potential to be future customers. After that, they sent MMS to some of them who were living close to the store. The MMS offered sample products to the potential customers and 6% of them came and collected the products. (Compared with the average0.2~0.3% response rate to the same internet promotion, this number is certainly very high.) The customers did not only collect the sample products, but many of them also purchased products after the sample collection. Thus, the sampling promotion through mobile phone was quite successful.
2) T.G.I.Fridays Mobile Services
T.G.I.Fridays, a restaurant under South Korea's local franchisee FoodStar, Inc., provides a variety of mobile services to its customers. Customers who download T.G.I.F Mobile service via their mobile phone can check all the promotions offered by the restaurant and they can also make reservations and orders through this program. The restaurant offers 5% discount to customers who make reservations via this program. This promotion did not only help the restaurant continuously update customers of its various promotions and events, but most importantly, the convenient reservation system cut down the waiting time, and this in turn translated to greater customer satisfaction.
5.2. Issues
As mobile phones are a tool that most South Koreans, and especially the younger generations, are highly involved in, mobile phones are considered very personal. According to studies, people will notice that their cell phone is missing within an hour of losing it, compared to a day or more it takes for people to realise the same about their missing credit cards and wallets (The Future of Tech, 2006). As a result, as with any other mobile advertising application, consistently pushing out advertisements and product promotions can be considered obstructive as well as invasive of the users' privacy. Advertisers should not only rethink their business models to factor in user privacy, but also provide users the option to opt out of promotions targeted for release on mobile devices.
6. Feeds from related articles on S.Korea: Social Mobile Applications
| | |
7. References:
- De Waele, R. (October 5th, 2008). "A Day in The Life of a Mobile Phone in Seoul". M-trends.org: Mobile Media Lifestyle.
- iCheil, (Oct 2008). "A Day in The Life of a Mobilephone in Seoul", Part 1,2 and 3. YouTube: Broadcast Yourself.
- Kanellos, M. (August 14th, 2006). "Korean social-networking site hopes to nab U.S. fans". CNET News.com.
- Uhlig, R. (19 Jun 2001) "Pocket lie detector that catches out hardcore fibbers". Telegraph.co.uk.
- Taylor, R. (2006) "Seoul Pushes Mobile Speed". BBC News.
- Bradford, T. & Hayashi, F. (2007). Complex Landscape: Mobile Payments in Japan, South Korea and the United States. Federal Reserves Bank of Kansas City. Can be found on the World Wide Web at http://www.kc.frb.org/Publicat/PSR/Briefings/PSR-BriefingSept07.pdf
- The Future of Tech. (2006). Upward Mobility. Business Week.
- Kyle (2008). "Mobile TV in South Korea: A Consumer Perspective". QuicklyBored: Mobile Entertainment News.
- Eaton, Matt (2009), "Disney strikes Korean mobile deal", Marketing Interactive, http://www.marketing-interactive.com/news/11017
- Chung, Yunho (2009), "Korean Mobile TV operators are struggling to survive", http://www.koreaninsight.com/2009/02/korean-mobile-tv-operators-are-struggling-to-survive/
- Kim, Joon-bae (2009), "Korea will focus on DMB, WiBRO and IPTV", http://english.etnews.co.kr/news/detail.html?id=200902170009&mc=m_022_00003
8. External Links:
- Leyden, J. (April 1st 2007). "Suicide prompts South Korea mobile data cap". The Register.
- (). Mobile Marketing and Advertising in Japan and South Korea: Business Issues, Ad Methods, Case Studies, and Forecasting. ABI Research. (Abstract)
- Blog: Jason DaPonte, Managing Editor for the BBC’s Mobile Platforms.
Dorothy_Poon |
Latest page update: made by Dorothy_Poon
, Mar 18 2009, 7:54 PM EDT
(about this update
About This Update
Edited by Dorothy_Poon
8 words added 12 words deleted view changes - complete history) |
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Keyword tags:
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South Korea
More Info: links to this page
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| Started By | Thread Subject | Replies | Last Post | ||
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| sashikala | Edits to be made | 2 | Nov 21 2008, 3:31 AM EST by sashikala | ||
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Thread started: Nov 20 2008, 5:57 AM EST
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Juli, in section 3, customers can make mobile payments using infrared-red technology or is it just infrared technology?
Also, regarding the restaurant reservation service, are you referring to a particular restaurant or any restaurant? If it is a particular restaurant, maybe you could name it or otherwise, change the way the sentence is written. Also, do let me know once you are done with these edits as well as section 5...Thanx. |
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| sashikala | polygraph handphone | 0 | Nov 20 2008, 6:03 AM EST by sashikala | ||
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Thread started: Nov 20 2008, 6:03 AM EST
Watch
By the way, the polygraph handphone bit is hilarious...too bad it doesn't work for the ladies who need it most - the ones with the compulsively lying boyfriends...
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