KT Chairman Lee Suk-chae is intending to take his iPhone success one step further with the introduction of Nexus One, a smartphone designed by Internet giant Google and manufactured by Taiwanese vendor HTC.
KT Chairman Lee Suk-chae speaks during a news conference marking the first anniversary of the merger between KT and its mobile carrier KTF in Seoul, Monday. / Korea Times
In a news conference Monday, Lee confirmed the late June release for Nexus One.
Lee predicts the device to be the next high-profile addition to its smartphone lineup. He hopes Nexus One, a standout among a growing pack of devices powered by the Google-backed Android operating system, will ease KT’s overreliance on Apple’s do-it-all smartphone. Lee’s plan will likely come at the cost of further deteriorating its relationship with technology giant Samsung Electronics.
KT, the country’s second-largest wireless carrier, managed to sell more than 700,000 iPhones since the late November release, nearly singlehandedly igniting a mobile Internet explosion. But the subsequent backlash from other vendors, including a particularly blatant Samsung, has KT worried about a smartphone service crisis.
Samsung, the world’s No. 2 handset vendor overall but an also-ran in the smartphone segment, apparently doesn’t enjoy being shown up on its home turf.
The company has been pumping the best of its handsets, including the much-anticipated Galaxy S, predominantly to SK Telecom, the country’s biggest wireless carrier and KT’s industry rival. Samsung has also been criticized by users for its lax software support of the existing handsets it has provided to KT.
The thinning of its smarpthone lineup is a major concern for KT, which fears the possibility of Apple going multicarrier for the next version of the iPhone, which may or may not be named iPhone 4G, although SK Telecom continues to maintain it will stay off the iPhone bandwagon.
Throughout Monday’s news conference, Lee, a rare business man who never chooses to mince his words, threw a slew of verbal jabs in the direction of Samsung, almost as if he was urging reporters to write about it.
According to Lee, the iPhone is the best among the smartphones that currently exist. At the other end of the spectrum is Samsung’s “Show Omnia,” a Windows Mobile-based smartphone that is elsewhere branded as Omnia II, which Lee degrades as a major letdown.
“The iPhone provides an incomparable security environment, which not only makes it the best consumer smartphone but a better device for business users than any other smartphone available,” Lee said.
“When Samsung launched the Show Omnia, the first handset that singlehandedly supported third-generation (3G) cellular networks, Wi-Fi and WiBro, it claimed that it would evolve into a specialized corporate device comparable to BlackBerry. They came up short.”
The Nexus One handsets provided through KT will be powered by the latest version of the Android operating system, Froyo, Lee said. He declined detailed comment on KT’s talks with Apple over the next version of iPhone and the iPad tablet computer.
KT is hoping that the Nexus One lures customers from a growing number of mobile users converting to Android devices. This market is currently dominated by SK Telecom, which is launching a slew of Android-powered devices, including the Galaxy S and Sony Ericsson’s Xperia X10, to combat KT’s iPhone onslaught.
Although SK Telecom has a larger smartphone arsenal, Lee insists that the iPhone will continue to be the one and only.
“In the globalized world, the devices favored by mobile users can be simply divided into two groups ― the iPhone and the rest,” Lee said.
“It could be said that only the iPhone provides a true `silk road’ to connect developers with the market. It’s questionable whether any smartphone other than the iPhone will ever have this type of driving force.”
Wireless Internet binge
The decaying relationship between KT and Samsung in the mobile-phone market makes them odd bedfellows in the business for WiBro, the local variation of mobile WiMAX, which competes with Long Term Evolution (LTE) in the 4G standard wars.
It’s not like either company has a choice ― KT is irreplaceable as the country’s biggest fixed-line and wireless Internet provider, while Samsung is the biggest global backer of mobile WiMAX along with American chip giant, Intel.
KT, Samsung and Intel are collaborating to establish a new company, dubbed WIC, or WiBro Investment Company, by the end of next month to advance the wireless technology and provide nationwide coverage.
KT plans to expand its WiBro network to 84 Korean cities by the end of the year, Lee said.
The iPhone was certainly a godsend for Lee, who had concentrated on levering KT’s fixed-line dominance to the mobile sector. KT completed its absorbing of its wireless unit, KTF, exactly a year ago, and Lee said the combined company had made important strides in its first full-year of existence.
KT reported an operating profit of 552.7 billion won (about $460 million) for the first quarter of this year, which represented a 44 percent increase year-on-year and marked the first time in six years it edged SK Telecom on a quarterly basis.
The upped data usage driven by the iPhones also allowed KT a 4-percent increase in average revenue per user (ARPU) during the Jan.-March period, while SK Telecom’s APRU slightly dipped.
With smartphones pushing the Internet to go mobile, Lee believes that KT’s massive fixed-line and wireless Internet network, which is unmatched by its rivals, will be manifested more clearly.
Lee said KT will further expand its wireless Internet network by enabling Wi-Fi on public transport options such as buses, subways and even ferries by sometime around October. This will be achieved by installing vehicles with the company’s portable gateway devices, dubbed as “Egg,” which converts WiBro signals into Wi-Fi signals.
“By stressing `open,’ `smart’ and `convergence’ as key words, KT has led the Korean information technology industry to a new phase after its merger with KTF,” Lee said.