We are indeed all about small. But without the big, there’s no understanding of the small. Here are some highlights from this past week in the greater South Korean tech industry.
- Samsung’s grim earnings outlook
Multiple Korean securities firms reported that Samsung is expected to have huge profits drops from its IT and mobile division in Q3. Last year in Q3, Samsung Electronics had operating profits of 10.16 trillion won ($9.97 billion), but many analysts lowered the operating profit estimate this year to 6.1 trillion won ($5.9 billion), showing a near 40 percent drop from the previous year’s numbers. Analysts cited heated competition (especially from Chinese players, most notably Xiaomi), absence of flagship phones during the quarter, and consumers waiting for Apple’s iPhone 6 as some of the causes. As remarked by Danny Crichton, an editor for Tech Crunch, Samsung’s faltering may potentially open more doors to startups as the country begins to draw more attention to the startup model in lieu of its large conglomerates.
- LG’s G3 is a winner
LG’s smartphone market share in Korea has reached 30 percent, the highest ever since it started its smartphone business back in 2010, while Samsung’s fell below 60 percent. LG’s domestic market share remained consistently in the 10 percent range early on, but in May, when it launched its flagship G3 smartphone, the company’s share has been rising since, reaching 29 percent in July.
- Samsung Mobile meets Cloud-Printing
Samsung is buying Canadian cloud-printing firm PrinterOn, which develops technology that allows users to print materials using their smartphones by connecting to printers through the Web. The acquisition of PrinterOn will help Samsung’s effort to standardize mobile printing. In addition, this movement can also be interpreted as a push to bulk up its lineup of mobile-software products, particularly for corporate clients, because the company was weak in attracting corporate and government clients for its mobile phones.
- Smartwatch parade
Samsung and LG announced new smartwatches. Samsung unveiled its latest wearable device, Gear S, a curved-display smartwatch, on August 27. Samsung’s newly released Gear S features a 2-inch Super AMOLED display and is based on the Tizen mobile operating system, which is Samsung’s alternative to Google’s Android mobile OS. Interestingly, Samsung now partnered with Nike, a long time partner of Apple, for running app on Gear S. LG Electronics too released a short glimpse of its new G Watch R. It is powered by Google’s Android Wear platform and it features a “suite” of LG fitness and health apps.
- Kakao under investigation for allegedly reneging on contract
The Korea Fair Trade Commission (FTC) has launched an investigation into allegations of unfair business practices by Kakao, which allegedly excluded or blocked market entries using its dominant market power. They are investigating the fact that Kakao unilaterally terminated its contract with mobile coupon providers, including SK Planet, KT MHows, CJ E&M, and OneCube Marketing, which may have resulted from initiating its own mobile coupon service in June. On September 1st, the FTC chairman Dae-Iae Noh hinted that the FTC may impose sanctions on Kakao Inc.. Once the investigation begins, it is likely to deeply affect the industry.
- Progress for Kakao payment platform
Kakao said on Tuesday, September 2 that its plan to launch a new payment service in collaboration with nine credit card firms in September is progressing smoothly. Despite that some reports say the launch may be delayed due to security concerns raised by credit card companies, Kakao announced that it is in the final stage and will be able to start the service in September. Kakao will use MPay operated by LG CNS as the authentication method, which is considered to be the safest program by the financial authorities.
- Naver opens up a communication channel dedicated to musicians
Naver launched a mobile web service called Musician League, an open platform for musicians and users to communicate directly with each other. The platform received fervent responses from mainly indie musicians whose songs face hard time reaching the public. Within only three weeks after launch, 670 bands have already uploaded about 1,700 songs.
- Naver promotes its own App Store
On Wednesday, September 3, Naver reached out to Korean Startup companies to encourage them to use Naver’s App Store in an effort to expand its App Store users. Naver announced that its App Store features a wide array of benefits, including mileage services, discount coupons, and lower fees in comparison to other competitors. Naver also emphasized that its App Store’s profit structure is designed in favor of developers, with 90 percent of profits going to developers, while 10 percent is distributed to Naver and its users respectively.