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Change in the Global competition environment of the mobile phone industry and response measures

Author Kim Jong-gi Date 2015.04.30 Issue No 611

The mobile phone industry in Korea has leaped to become the No. 1 country in terms of the global sales of mobile phones in 2011 after growing rapidly based on strategies to increase the quality of products and world-class IT technologies, such as mobile communications and semiconductors.

However due to deepening competition for innovation between Korea and the US as well as late-starter companies in China and India in hot pursuit, the Korean companies’ global market share of mobile phones has on the decrease since the second quarter of last year  
● Smartphone market situations have changed from having one strongest country (Korea) to two strong companies (Korea, the US), and China has jumped to become the No.1 in the market share by using low price and high function strategies    

The domestic mobile phone industry has weaknesses in SW but is evaluated as having significant growth potential, since it has the remarkable capacity to innovate products and technologies and the related IT industry foundation
● It is considered that the causes of the recent decline in business performances are inadequate responses to changes in market conditions such as widely used technologies and increased demand for low-priced mobile phones, and insufficient efforts to discriminate prices and products

The domestic mobile phone industry needs to exert efforts to improve the structures to be more future oriented, from the perspective of improving capacities in leading areas, and advancing more into promising new areas
● With regard to enhancing capacity in leading areas, it is needed to produce higher value added products by strengthening “premium strategies” and “capacity of key components,” select low value added areas discriminatively and then focus on them
● In order for the industry to grow consistently and produce higher value added goods, there should be an increase in investments and a strengthened foundation for growth to develop and commercialize core technologies in the future, such as an intelligent convergence terminal equipment and platform, wearable devices, and the internet of things