South Korea's IT market is projected to continue to strengthen in 2010, after signs of an upturn in consumer demand in the second half of 2009. South Korean IT spending is expected by BMI to increase from US$16.1bn in 2010 to around US$20.3bn in 2014. South Koreans have experienced a rapid increase in per-capita incomes (in US dollar terms) in recent years, and BMI forecasts that Korean per capita IT spend will rise from US$750 in 2010 to US$921 in 2014.
There will be a number of key IT market drivers and growth trends including notebook PCs, IT outsourcing and industry-specific software applications. Going into 2010 the consumer segment was driving IT market growth due largely to increased consumer sales of notebooks. Corporate IT spending should pick up in 2010 however, as business confidence improves following a resurgence of orders in the wake of the economic slowdown.
In the consumer segment, growing broadband penetration and rising demand for notebooks will continue to be growth drivers. In the enterprise segment, the industry trend is towards specialised vertical-specific applications. Demand for advanced IT services such as outsourcing is expected to show a strong growth trajectory.
Industry Developments
South Korea plans to invest 400bn won (US$341.1mn)
In September 2009, the Korean Communications Commission approved distribution of Apple's iPhone in the South Korean market, waiving the requirement that locally retailed handsets had to use locally developed location-based technology. The take-off of smartphones in Korea, where development of this segment has lagged behind many other markets, could have negative implications for demand for netbooks. In 2009, the growing popularity of small form factor netbooks was a computer market growth area.
In 2009 the Ministry of Public Administration and Security (MOPAS) announced the results of its latest process of designating software in terms of its fitness for use in the public sector. On February 2 2009, the ministry designated 28 out of 34 applicant software packages as 'administrative software'. Software made by Korean developers accounted for fewer than 40% of the software designated as 'administrative', a lower portion than on previous occasions.
Competitive Landscape
Local vendors Samsung and LG remained the leading players in the Korean PC market in 2009, with a combined market share in the region of more than 50%. Samsung took pole PC market position, with a market share approaching 40% in Q409, more than twice as much as that of closest rival LG. However the combined share of the two big domestic vendors has slipped slightly from a previous level of around 60%. Meanwhile, the leading US vendor, HP, was thought to have around a 10% share.
The emergence of netbooks has created opportunities for foreign vendors in what had previously been one of the most closed computer markets in the world, due to the dominance of the Korean giants. Companies like Asus and MSI saw sales rise in the region of 50% in H109, compared with the same period of 2008. In August 2009, Acer announced that it was moving back into the Korean market after an absence of eight years.
US IT giant HP said that it will look to grow in every segment of the Korean market in 2010. The company will look to generate growth from large customers, as well as by acquisitions, research and development (R&D) and infrastructure businesses. HP has set a target of increasing the number of its key customers in the Korean market from the current three to more than six: the current three are Samsung Group, SK Group, and Shinhan Financial Group.
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Report Table of Contents:
Executive Summary
SWOT Analysis
- South Korea IT Sector SWOT
- South Korea Political SWOT
- South Korea Economic SWOT
- South Korea Business Environment SWOT
Asia IT Business Environment Ratings
- Table: Regional IT Business Environment Ratings
Market Overview
- Asia Regional IT Markets Overview
- Market Overview
- Industry Developments
Industry Forecast Scenario
- Table: South Korea IT Sector (US$mn Unless Otherwise Stated)
- Internet
- Table: South Korea Telecoms Sector - Internet - Historical Data & Forecasts
Competitive Landscape
- Hardware
- Software
- IT Services
- Internet And Broadband
- Table: South Korean Broadband Market, March 2009
- Table: South Korea Broadband Access Types By Operator (March 2009)
Macroeconomic Forecast
- Table: South Korea - Economic Activity
Company Profiles
- Samsung Electronics
Country Snapshot: South Korea Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
BMI Methodology
- How We Generate Our Industry Forecasts
- IT Industry
- IT Ratings - Methodology
- Table: IT Business Environment Indicators
- Weighting
- Table: Weighting Of Components
- Sources
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