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South Korea called on to adopt global cell phone standards, defend rank in computer chips

SEOUL, South Korea (AP) – South Korea is undercutting its growth potential in the global cell phone market by using its own standard and could lose its dominance in computer chips to Taiwan and China, participants at an international technology forum said Tuesday.

”I think really the key question that I have (is) will the Korean market adapt more of the global technologies,” said Tero Ojanpera, chief technology officer for Nokia Corp. He called that ”critical … for Korean companies to succeed.”

Ojanpera, also a member of the Nokia group executive board, spoke to reporters on the sidelines of the Seoul Digital Forum 2007, a three-day gathering of technology and media industry figures.

He cited South Korea’s development of its own wireless Internet software platform for mobile phones as a drawback both for companies like his own in entering the local market as well as increasing research and development costs for South Korean companies.

Nokia stopped selling phones in South Korea in 2003 after failing to gain significant market share here.

The puzzle about South Korea, Ojanpera said, is that it is highly innovative yet appears unable to translate that to the global market for phones, which his own company dominates with a 36 percent share, double that of its nearest competitor.

Samsung Electronics Co. and LG Electronics Inc. are major players in the global handset market. Samsung is ranked No. 3 behind Finland’s Nokia Corp. and Motorola Inc. of the United States, while LG stands in fifth place.

”Actually this is one of the most advanced markets when it comes to bringing content to mobile phones, introducing new innovative services,” he said of South Korea.

Ojanpera said that Nokia is working with Samsung and LG to try and agree on a software platform for smart phones.

He called South Korea’s move toward a more global 3G standard for mobile phones encouraging.

”But will the software platform be also according to global standard or will it be Korea specific?” he asked.

Ojanpera said that local standards that have been developed in South Korea and Japan make it much harder translate them to the global market.

He cited Japan’s successful Internet-linking i-mode cell-phone system, which is a hit in Japan but had no success outside the country.

Separately, the head of a U.S.-based technology industry market researcher said that Taiwan and China could in coming years surpass South Korea in production of dynamic random access memory, or DRAM, chips, used mainly in personal computers.

”The share of production in Taiwanese and Chinese suppliers has been growing very rapidly. And we believe that the current trend indicates that China and Taiwan will pass Korea as the region with the largest share of DRAM production by 2010,” said Derek Lidow, president and CEO of iSuppli Corp., which compiles data on various technology industries.

If that comes to pass, he said it would mirror South Korea’s loss of dominance in the liquid crystal display sector to Taiwan and China about three years ago.

Lidow said that a higher number of suppliers in Taiwan and China mean they are able to spread investment risks over more players than in South Korea.

”This makes it quite hard for Korean suppliers to fight off so many competitors at once,” he said.

Lidow suggested that South Korea mimic Taiwan by liberalizing the investment environment to encourage more startups which could spread risk among a greater number of players.

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