Much has been made of second-place Korean mobile carrier KT picking up the iPhone, as the world waits to see whether the smartphone prodigy can cut it in a famously competitive wireless market. However the really interesting question is not whether Koreans will take to the iPhone, but what they will do with it. Korea's dark technology secret is that for most Koreans this will be their first time on the mobile internet.
The world knows South Korea, rightly, as leaders in wireless and internet technology. South Korea was the first country to have mobile 3G, mobile TV, and pretty much everything else mobile, and is first in the world in broadband rankings. But the country remains woefully behind in mobile content, due to shockingly high walled gardens and byzantine data plans.
In a sort of quid-pro-quo for the massive capital investments the carriers made to build the world's first 3G data networks, the South Korean government and public have not pressed for an open mobile ecosystem as they have in the West. The leading South Korean mobile operators - KT and SK Telecom - have complete control over Korean mobile content, and almost everything has to go through the carrier deck.
As a result, only 1% of Korean cell phone users have smartphones according to Korean paper the Joon Ang Daily, compared to the US where smartphones made up of 31% of new phones in Q3. These are not old phones either - half of all Koreans replace their phones every two years.
Korean phones may have super high-end features, but they are still feature phones. For the uninitiated, feature phones are basically everything that is not a smartphone, which is to say everything without its own operating system and the ability to install third-party applications like a computer. Feature phones tend to have limited web browsing abilities. They have lots of cool features - or what could be called "apps" - but these features are pre-installed by the operator and can not be expanded or modified.
Thus we find that in 2009 the South Korean mobile internet is one of the most backward and underdeveloped in the world, despite their world-leading infrastructure and handsets. Korean carriers have been deathly afraid of a mobile internet that they could not control. In 2008, when LG Telecom offered OZ, its unrestricted mobile internet service, this was considered a revolution in the South Korean market, while SK Telecom first announced unlimited data service plans in April (2009!!!).
The true impact of the iPhone on the South Korean market will be to introduce the real mobile internet to South Koreans, much like the iPhone did in the US (where mobile internet was available for years before the iPhone but never caught on). As in the US, the ripple effect on competitors has come quickly. While market leader SK Telecom declined to pick up the iPhone, it made a preemptive strike at KT by opening up its own app store, T-Store (I don't speak Korean so I hope this is the right link ;-). Perhaps because of the harsh criticism the T-Store received, SKT has just announced plans to introduce the Motorola Droid and HTC phones to continue the fight.
The clear winner in all this is the Korean consumer, who will have access to unlimited mobile applications for the first time. Based on what the Koreans have already come up with for mobile phones and broadband Internet, I can't wait to see what they come up with once they put the two together.