By Troy Stangarone

In recent years, South Korea has been in a space race of sorts with North Korea, in which it risked falling behind after the recent successful North Korean launch on December 12. With the successful launching of the Korea Space Launch Vehicle-1 (KSLV-1), South Korea has joined an elite group of thirteen countries who have successfully put a rocket into space and pulled even with its neighbor. Now the larger question is what should come next for South Korea’s space program?

The successful North Korean launch increased the pressure on South Korea to succeed in its third attempt to put the KSLV-1 into space. However, the two situations remain starkly different. While North Korea is suspected of attempting to develop intercontinental ballistic missiles on which it can place a nuclear payload in defiance of UN sanctions, South Korea has been transparent in its efforts to develop a space launch vehicle for commercial purposes.

While national pride may have been affected by North Korea’s success in placing a rocket into space first that is not necessarily an indicator of the future success of South Korea’s own space ventures. During the first space race between the United States and the Soviet Union, the Soviet Union was the first to reach outer space. However, the United States has arguably had the more successful space program.

The KSLV-1 was built using a combination of Russian and South Korean technology, though South Korea has set a goal of placing its own fully developed rocket into orbit by 2021.  South Korea also hopes to become a player in the global space services market as part of a drive to increase high value exports.

The history of space flight has been dominated by government backed ventures. South Korea’s development program has been relatively cheap compared to others at an estimated $500 million for the KSLV-1. Much like rocket development in other countries, the private sector has played an important role in the process with the Korea Aerospace Research Institute building the Korean designed second stage booster.

However, independent players in the private sector are increasingly becoming important in the industry. Multiple U.S. government agencies are looking to open up delivery to private suppliers such as SpaceX, which can deliver a payload into space for between $80 to $125 million, a fraction of the current price. For smaller payloads, Virgin Galactic thinks it will be able to cut the cost to $10 million. Perhaps further increasing the competition from the private sector are SpaceX’s efforts to develop the world’s first fully reusable rocket, which could cut the price of a launch to a mere $250,000.

South Korea has a history of succeeding where other’s believed it would not. In high competition industries such as steel and automobiles, companies such as Posco and Hyundai became global success despite the odds. In the last 50 years, underestimating South Korean determination has not been a successful bet. However, these were also largely private sector successes. If the goal is to become a successful supplier of space launch vehicles, South Korea may need to consider a stronger private sector role in its efforts going forward.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. The views expressed here are the author’s alone.

Photo from thebadastronomer’s photo stream on flickr Creative Commons.

By Chad 0′Carroll

In light of a California jury ruling Friday, Samsung now looks set to have to pay Apple more than $1 billion in damages for violating hardware and software patents following the conclusion of what may well be seen as a landmark case.  With the verdict seen as a big win for Apple, Samsung shares took an immediate dive of nearly 7.5% on the news, despite their reported intention to appeal the ruling.  But with the U.S. case representing just one of over fifty lawsuits being pursued in ten countries across four continents, what are the implications of the California judgment and what will be the consequences for the two companies and smart phone industry as a whole?

What the U.S. Ruling Means

The California jury found that Samsung infringed upon Apple’s physical design and user interface patents, often willfully, and that several of its products replicated Apple’s trade dress, especially with regarding the iPhone product series.  While Samsung had argued that Apple infringed several of its own patents related to utility and design, the court instead found that its products actually infringed Apple patents in those areas. As such, the jury rejected all of Samsung’s claims against Apple while upholding all of Apple’s patents. The implications for the South Korean conglomerate are therefore substantial.

Most damning of all, of 21 Samsung smartphone and tablet designs raised in the case by Apple, 100% of them were found to breach Apple’s patent 381 (pertaining to a “bounce-back” scroll feature). And on Apple’s two other main claims, an overwhelming majority of Samsung products were shown to have breached patents, with just a handful in each category escaping the breach.

In Samsung’s marginal favor, it was established by jurors that the Galaxy Tab 10.1 tablet (recently banned in the American market by the same judge – Ms. Koh) did not infringe on any physical design patents.  This means Samsung will now be allowed to sell the Galaxy Tab 10.1 on the U.S. market.  But while Samsung may be able to recoup some lost sales profit from Apple, the amount will likely be extremely low in comparison to the $1billion it now owes.

The bottom line is that in the eyes of one patent expert, Samsung has been shown by the outcome of this case to be a “reckless copycat”.  And because some of the infringement is related to Google’s Android operating system, it seems the jury agreed with Steve Jobs’ claim that Android is a “stolen product”.

Reports now suggest that both sides will file for a preliminary trial injunction, which is set for 20 September. That will decide the fate as to which products, if any, will face a ban.  Apple has already outlined 8 Samsung products that they want banned as a result of the California ruling. But as an immediate consequence, Samsung will at the very least be required to pay out $1 billion dollars – although this could potentially be tripled due to Samsung having willfully infringed the patents.

What the ROK Ruling Means:

Before the announcement of the California jury ruling, a Seoul court ruled Friday on a case brought to it by Apple regarding Samsung cell phone and tablet designs.  In contrast to the U.S. case, the South Korean court said that Samsung’s cell phone and tablet computer designs did not copy the look and feel of Apple products, adding that Apple had in fact infringed on several of Samsung’s wireless technology patents.  However, reflecting the unanimity of one element of the California court’s decision, the Seoul court did rule partly in Apple’s favor, saying that several Samsung devices had infringed Apples “bounce-back” scroll feature.

In contrast to the vast volumes of money involved in the California case, as a result of the Seoul ruling Apple will pay 40 million won ($35,400) for infringements while Samsung will pay 25 million won for violating just the one patent.  More cumbersome for both companies is the fact that the court also ordered a ban of a handful of Apple and Samsung cellphone and tablet devices implicated in the patent infringements.  However, given that none of the two manufacturer’s latest devices were implicated, the impact of this development could prove minor.

It is nevertheless of interest that this case result occurred in South Korea, Samsung’s home territory. Patent attorney Jeong Woo-sun said,  “Out of nine countries, Samsung got the ruling that it wanted for the first time in South Korea.”  Some experts have since expressed concern that the ruling might invite a trade war in which South Korean consumers could ultimately lose out.  If Samsung and LG now move to block rivals’ entrance to the ROK market if they do not agree to licensing terms related to some of the standard patents involved in this case, then those companies would either have to bow to the demands or abandon the South Korean market entirely.

What’s Happening Around the World

While developments in the U.S. and South Korea last week reflect two important territories involved in the dispute, there are similar cases taking places across a total now of four continents.  According to Florian Mueller of FOSS Patents, there are over 50 cases open in ten countries, meaning that things could still change in dramatic ways depending on the countries involved.  As of now, the next Apple vs Samsung case set to take place will be in Mannheim in Germany, on September 14.

The evidence so far shows Samsung losing the vast majority of its offensive cases against Apple, having lost three times in Germany, and once in France and Italy.  In the Netherlands it won a tiny amount of damages, but not an injunction, while in the U.S., all claims Samsung raised have now been lost. As indicated above, the only country Samsung has prevailed in cases against Apple has been South Korea.

But Samsung has nevertheless overturned a number of legal challenges raised by Apple, with one notable case in the UK in which the judge said Samsung could continue selling its Galaxy 10.1 tablet because its design wasn’t as “cool” as Apple’s (meaning it could not be confused with the iPad series).

Whether the outcome of the U.S. or ROK decisions will influence other open cases around the world remains to be seen, but right now things do look to be moving in Apple’s favor on a global basis.

Moving Forward

The immediate effect of both cases, should appeals by either company prove unsuccessful, will be payment of the immediate fines as issued by both courts.  But even $1 billion is nevertheless small peanuts for the South Korean conglomerate.  More important is the lasting effect on Samsung’s share price as a result of the legal action in California.  Having lost 7.5% on Friday, should Samsung continue to suffer in the mid to long-term, then investors may lose confidence in the South Korean firm.  One issue that may cause longer term losses is whether or not Apple succeeds in getting Samsung devices banned from sales in the U.S.

Should Apple succeed in banning products from the U.S. or other national markets, then Samsung will have to either update software or even change design elements to ensure their products do not violate Apple patents. Samsung has a proven history in rapidly working around patents, having redesigned software to ensure its products can stay on shelves after the cases that have shown them to have infringed on Apple’s patents. However, in the case of hardware redesign obligations, it can be extremely costly to make the necessary alterations to make a product acceptable for sale, for example by changing the casing or packaging design.  As such, if Apple succeeds in banning some of Samsung’s better selling cell-phones in the U.S. market from a hardware perspective, it could take significant resources for Samsung to get those same products back on shelves.  But Samsung can still take comfort in the fact that its newest models are not on the Apple ban “hit-list” and that it has a strong history in rapidly releasing revised products (unlike Apple’s slow iPhone release pace).

From a more general perspective, moving forward one can expect Samsung to be a lot more careful in the design of its cell phone and tablet devices as a result of the Californian ruling.  Forms of Samsung phones will likely be a lot rounder than Apple devices moving ahead, and from a software perspective we can expect increasing differences between functionality. On the flipside, it is likely Samsung will become even more protective about their own technology, raising the potential for even more litigation between the two companies in future.

In terms of the broader industry, many have been viewing the Apple vs. Samsung case as a proxy war between Apple and Google.  With Android accounting for over 85% of the smart-phone market, consumers currently have few options between iPhone and Android cell-phones.  Confident from this legal win, Apple may now be at pains to prove Steve Jobs’ allegation that Android is a “stolen” operating system, something that if they succeed in proving from a legal perspective, could open up a whole can of worms with regards to the myriad hardware manufacturers that use the Google Android system in their phones.   This could be especially troubling for Samsung, as a legal battle over operating systems could be crippling. While Microsoft’s new Windows Phone has been praised for its innovation, few customers have adopted the phone’s running Microsoft’s platform.  So, was this case really Apple vs Samsung, or the successful start of Apple vs everyone that uses Android? Interestingly, Google is already trying to distance itself from Samsung to avoid just that possibility.

Chad 0’Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Photo from Siddartha Thota’s photo stream on flickr Creative Commons.

by Matthew Tranquada

On Monday morning, in a federal courtroom in San Jose, lawyers for Samsung and Apple met to pick a panel of 10 jurors to decide a case worth $2.5 billion in damages for patent infringement. At the heart of the case is Apple’s contention that Samsung’s designs of its Galaxy series of smartphones and tablets infringes on the look and feel of Apple’s devices, many elements of which are patented. This has already resulted in preliminary injunctions against the import and sale of Galaxy Tab 10.1” tablets and Galaxy Nexus smartphones.

Of course, this is far from the only legal battle being waged by the two companies in what has alternately been referred to as a “mobile device war” or “mobile patent war”. Since April 2011, Samsung and Apple have launched over 30 lawsuits on four different continents, with both sides arguing that the other has infringed their intellectual property. At stake are the lucrative profits in the rapidly expanding mobile device space, especially as consumer adoption of smartphones increases and the functionality of tablets improves to rival traditional PCs.

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While the two companies lock horns in courtrooms around the world, though, they have quickly gobbled up 54% of the global smartphone market by some estimates. At the same time, several other phone makers have seen their share of the market severely diminished as Samsung and Apple pump out popular handset after popular handset. Nokia and Research in Motion (RIM) have moved from dominant positions within the smartphone market to near paupers, forced to layoff workers and drastically alter their business plans to counter their decline. Taiwanese manufacturer HTC, once the darling of the Android OS segment of the market and partners with Google on the Nexus One phone, has seen sharp declines in sales. Motorola Mobility and Palm, Inc. were swallowed up by Google and HP, respectively, after their smartphone strategies failed to win over consumers. And Sony and LG have, for the most part, failed to find solid footing in the smartphone market space outside of their home markets.

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The lead that Samsung and Apple have in the smartphone market is so pronounced that, according to at least one analyst examining the top eight mobile companies, they account for 99% of profit made on smartphones. This works out to 73% of operating profit for Apple and 26% of operating profit for Samsung, with HTC accounting for the remaining 1%. According to results for the second quarter of 2012 released on Friday, mobile device sales have helped boost Samsung to a record profit of $5.9 billion dollars, with the mobile division accounting for nearly 70% percent of earnings. In comparison, the first three months of 2012 saw a profit of $11.6 billion for Apple, driven by $22.7 billion dollars in revenue from iPhone sales and an additional $6.6 billion in iPad revenue.

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The importance of mobile profits to both companies’ bottom lines is fairly clear from the earnings data, and the ongoing legal battles may simply be about safeguarding those profits. But the combination of huge profits and extensive patent portfolios also has more sinister implications for competitors to Apple and Samsung in the mobile market. Both companies have ample capital to reinvest into technological innovation while their competitors struggle to stay afloat, and their patents could also provide a legal impediment to new challenges in the market.

But the litigious character of the battle for mobile supremacy between Apple and Samsung is increasingly earning them the ire of judges all over the globe. In June, Judge Richard Posner, presiding over a patent lawsuit between Apple and Google’s Motorola Mobility in California, scrapped the case and prevented both sides from refilling. Since then, he has appeared in the press as a staunch critic of patent infringement lawsuits and an advocate of patent reform. In Australia, Judge Annabelle Bennett has called the ongoing suits “ridiculous” and suggested that mediation should be the proper legal remedy. And in the United Kingdom, in perhaps the most embarrassing blow for Apple, Judge Colin Birss ordered that Apple must post a notice on their U.K. website for six months declaring that Samsung did not copy the design of the iPad (albeit his ruling stated that Samsung’s tablets would not be confused with Apple’s products because they are “not as cool” as the iconic iPad).

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The $2.5 billion lawsuit set to begin in California is certainly the largest case currently ongoing in the battle between Samsung and Apple, but ultimately it may prove to be a drop in the bucket in terms of money. Samsung and Apple are jockeying for position within advanced cell phone markets in developed nations, but this is only a prelude to the expansion of smartphones into developing markets such as Brazil, India, and the world’s largest cellphone market, China. The success of Apple and Samsung in dominating the smartphone market may be fleeting if up-and-coming rivals such as Chinese electronics manufacturers Huawei and ZTE, who are beginning to introduce capable smartphones at aggressive prices, can penetrate developing markets where consumer preferences may be influenced more by value than by brand loyalty or the “cool factor”. We shouldn’t forget that it was just over five years ago that Apple introduced the iPhone and upended popular notions about what a smartphone was.

The relative advantage that Apple and Samsung enjoy in terms of mobile device profits, as well as their sizable R&D operations and legal battles, may make it prohibitively expensive for others to enter the smartphone market, but it is not yet an insurmountable obstacle for other challengers. It may delay the emergence of a legitimate competitor for the two companies, but it is unlikely to stop other companies from trying to grab a piece of the multibillion dollar market they dominate. In the meantime, the questionable lawsuits and worldwide courtroom dramas will continue to define the terms of competition in the marketplace for years to come.

After last week’s news that Apple had successfully won an injunction to block the sale of Samsung’s Galaxy Tab computers in the United States comes another major legal development also in Apple’s favor.  As of close of business on Tuesday, Galaxy case judge Judy Koh effectively banned sales of the Samsung Galaxy Nexus cell phone in the U.S. market through an injunction that cited “probable” infringement of four Apple patent claims. With Apple having posted a bond of $96 million to cover any profit that Samsung would lose in the event the ruling is later overturned, the injunction has now come to life and Galaxy Nexus sales are now effectively banned in the U.S.  This is a worrisome development for Samsung in its continuing legal battle with Apple which may also hinder the evolution of the Android and even iPhone mobile operating systems.

The Galaxy Nexus was developed by Samsung in partnership with Google, forming the third generation of the two firms ever-evolving Nexus smartphone series.  During the design phase of the latest offering, Samsung and Google collaborated in creating a new search feature known as the “Quick Search Box”.  Using the “Quick Search Box”, Galaxy Nexus users receive search suggestions before typing is completed and answers to queries based on an aggregation of data from the web, installed apps, and from contact information. According to Apple, the “Quick Search Box” is too much like Apple’s own Siri search tool and Judge Koh’s decision appears to confirm their claim that it may represent a patent infringement. Even some third-party reviews of the Galaxy Nexus (cited in the actual case) appear to validate Apple’s claim that “Quick Search Box” could reduce iPhone sales, with one review saying it adds a “whole new layer of functionality” that would help Android phones “win new customers, even ones with iPhones.”

While Google has already removed the Galaxy Nexus smartphone from its “Play” store, the wording it uses to explain the move, “Coming Soon”, suggests that it has plans to get the phone back onto the market as soon as possible. Already reports are emerging that it is working on a software patch for the Nexus that will undermine Apple’s patent infringement claim and allow for a resumption of sales, although this will seemingly result in some decrease in functionality in the Samsung phone: “Once the patch is rolled out, devices that are updated will see the home screen-based quick search option simplified so as to only show results from the Web, with local search options disabled entirely on the device. The voice search option will also be restricted to retrieving results from the Web”.  So while Samsung and Google may be able to get around this ruling, the solution will be to the detriment of the design and functionality of the Android operating system.

As I have outlined before in two other Peninsula articles, it seems Apple is really trying to prevent Samsung – its biggest competitor – from selling phones in cases that seek to prove patent ownership of extremely general concepts. The idea that an aggregated search facility can only be the sole purvey of Apple iPhone is difficult to comprehend , inferring that it was Apple who invented the actual concept of information aggregation.  And a look at the three other patent infringement claims that form the basis of Apple’s Nexus Galaxy litigation underscore their general concept approach.  These claims argue that the Galaxy Nexus cannot have a slide to unlock the phone, cannot have auto-fill search, and cannot have data underlined and made actionable (i.e .the ability to click a number in a text to call it). As one programmer put it, “Apple seems to own every graphical user interface ever invented”, adding that if features like these can be patented, “it should be possible to patent the idea of [having] text or images in web pages.”

As Apple continues putting legal pressure on Samsung, it is important to remember that the iPhone itself has benefited from bringing together many technologies that were preexisting. Many researchers and companies invented technologies that predate the iPhone and one of the reasons the iPhone was originally so successful was because it drew together these extremely innovative technologies in one place. But that shouldn’t mean other manufacturers cannot also build touch screen smartphones that have user friendly interfaces.  Indeed, that Android smartphones have similar functionality to iPhone should come as no surprise because both devices have the same purpose – to facilitate mobile communication.

Take a look at software products in other areas and you will also find many similarities. Internet Explorer, Google Chrome and Mozilla Firefox all have striking similarities. But imagine if the inventor of the “bookmark” wanted to sue them all as a result of patent infringement? In short, when programmers write software, it is natural for similarities to exist. And while Android may have been inspired by some iPhone functionality, Google have often refined that functionality to the point it has even copied back by Apple and ported to newer iterations of the iPhone.

Up to now, Apple has spearheaded the main body of patent litigation in the smartphone market and this has encouraged Google and Samsung to do the same, motivating them to patent every innovation they come up with. The result is that if the legal fracas between the companies continues, we may arrive at a situation where Apple could be boxed into a position where it cannot add a lot of the newer and yet to be released Google innovations that one might have previously considered as “general” features.  Already this is happening, with Apple’s iPhone lacking Google Map 3D navigation or voice translation capabilities.  And if Apple keeps winning cases like this one, Android customers will also eventually be locked out of basic functionality that makes owning a touch screen phone practical to use.

Chad 0Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Photo by PopCultureGeek

The seemingly perpetual legal fracas between Apple and Samsung took a turn yesterday when U.S. District Judge Lucy Koh of California entered an injunction to block the sale of Samsung’s Galaxy Tab 10.1 computers in the United States.  The block of sales of the newest Galaxy tablet, touted by many industry experts to be the main rival for Apple’s iPad series, was the result of Samsung’s new tablet being “virtually indistinguishable” from Apple’s iPad and iPad 2 models.

Given on Monday Jude Koh had said she would deny the injunction based on the assumption, overturned, that the Apple’s design patent was likely invalid, the move has come somewhat as a surprise for Samsung’s legal team.  “The relief being given to Apple here is extraordinary. Preliminary injunctions are rarely asked for and rarely granted,” said Colleen Chien, a professor at Santa Clara Law in Silicon Valley.  With Samsung filing a notice of appeal within just five hours, the injunction will come into effect as soon as Apple posts a $2.6 million bond to cover a potential damages payment to Samsung if Apple loses the case.  So what is this case about, what does this mean for Samsung, and what about the broader impact on the portable communications market?

Back in April, Apple CEO, Tim Cook explained Apple’s position regarding the ongoing battle with Samsung.  “I’ve always hated litigation, and I continue to hate it. We just want people to invent their own stuff…But the key thing is that it’s very important that Apple not become the developer for the world. We need people to invent their own stuff.”  With Judge Koh’s ruling that Samsung’s latest tablet was “virtually indistinguishable” from the iPad, it seems that this case may well strengthen Apple’s increasingly wide ranging claims that, “it is no coincidence that Samsung’s latest products look a lot like the iPhone and iPad, from the shape of the hardware to the user interface and even the packaging”.

A close look at the specific Galaxy Tab in question does indeed reveal several design similarities, so it is arguable that Apple’s case has some merit.  For example, the general design of the unit was so similar that Samsung’s legal counsel couldn’t distinguish the two products when Judge Koh showed them in the courtroom at a limited distance.  Even between the power cables of the iPad and Galaxy Tablet there are clear similarities, with the two designs employing USB to wide angle charging ports.  However, take many digital product lines and you’ll find many design similarities that exist. Flatscreen TVs, digital cameras, and GPS navigation units all share many close resemblances from one model to another. But in those cases we don’t hear about the type of design patent infringement claims that Apple is referring to.

By pointing to Apple’s penchant for generic design claims, Samsung had previously stalled Apple’s claim that it had exclusive rights to the form of the iPad by showing adjudicators a device eerily similar to the iPad that featured in the 1968 film, “2001: A Space Odyssey”.  Now Samsung say that Apple’s win as a result of “generic design” patents means that “innovation and progress in the industry could be restricted.”  It is a claim that has some merit, meaning that hardware developers for standard-form products like phones, laptops and tablets might have to pay closer attention on trying to develop unique designs. But who wants a triangular phone, circular laptop or hexagonal GPS unit?  Well, there are ways around the most recent litigation that call for less dramatic means.  Because the scope of the Galaxy Tab design breach in this case is reported to be “relatively narrow”, Samsung will be able to design around the problem and continue sales if it so chooses (as it has done in other markets).  However, this adds additional hurdles to the release of hardware in markets where Apple is successful in stinging Samsung on general design issues.

But Samsung does appear to be changing gear.  While a close look at earlier Samsung Galaxy cell-phones reveals some resemblance to the iPhone, with the Samsung Galaxy III the South Korean conglomerate does now seem to be taking steps to avoid patent cases like this in its core smart-phone line, with a now radically different design to that of the iPhone.  Clearly rattled by the prospect of continued disruptions to its business and the potential for injunctions that could halt sales during important release windows, Samsung have evidently deemed it prudent to air on the side of caution for new product launches.

While Samsung may have lost this case, the U.S. sales ban follows last week’s ruling in The Hague that Apple has to compensate Samsung for damages caused by a breach of patents since August 2010.  And it is almost certain that as part of the tit-for-tat cycle of cases we’ve seen in recent months, that Samsung lawyers will almost certainly have the iPhone 5 in their targets shortly after its eventual release.  So who wins from all of this?  Despite being prevented from selling its latest tablet in the U.S., Samsung shares gained 2.5% at the close of trading in Seoul yesterday.  With Apple focusing so much on comparing their products to Samsung’s in courts across the world, perhaps they are indirectly underscoring the credibility of Samsung’s products to customers as real alternatives to Apple’s own range.   As such, it is hard to know if Apple will emerge the long-term winner from its continued and costly legal battle.

Chad 0Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Photo from 3 Sverige’s photo stream on flickr Creative Commons.

By Caryn Fisher

The ongoing trial of Anders Behring Breivik, the alleged mass killer from Norway who is undergoing trial for the murder of 77 people, reopens the concept of a link between violent video games and acts of violence in real life. During his trial, Breivik stated that he used the game “Call of Duty: Modern Warfare 2” as shooting practice prior to the incident and had in the past spent time playing “World of Warcraft” for up to 16 hours a day. Although various studies and recent articles by Forbes and Reuters agree that there is no correlation between violent video games and violence itself, there is still a fear of correlation which the media plays upon, particularly in cases such as school shootings. Additionally, there also exists the problem of video game addiction, a problem currently faced by the South Korean government, as well as many other nations.

Imagine Seoul, a city where there is a 24-hour PC room on almost every street, filled with people of various ages who stay there from anywhere to a few hours to over a day. South Korea is a country where celebrities aren’t just movie stars and singers, but are also pro-gamers, such as Lim Yo-Hwan (aka Slayers_BoxeR), who earns around US $400,000 a year. In addition to celebrity pro-gamers, as of 2002, many of Korea’s major companies, such as SK Telecom and Samsung Electronics, began to sponsor teams to compete in pro-matches and tournaments, some of which reached audiences of 120,000 on-site and over 1,000,000 through online streaming.

For any video game fanatic, this would seem like paradise, but to the Korean government, this might not be the case. According to the National Information Society Agency, approximately 8% of the population in South Korea between the ages of 9 and 39 suffers from internet addiction, the rate being the highest for those between the ages of 9 and 12, coming in at around 14%. Due to this the Ministry of Gender Equality and Family instituted the Cinderella Law (also known as the Shutdown Law) in 2011. Under the Cinderella Law, individuals under the age of 16 are banned from accessing gaming websites between midnight and 6am. The South Korean government started this initiative in the hopes of treating people for gaming addiction and to help increase the amount of time that students spend studying, rather than online.

Despite the fact that this program was started less than a year ago, there have already been some mixed reactions by the parents of the game playing youth. Some parents state that they feel the government is trying to dictate their children’s lives, while giving the parents less say in how to educate their children. At the same time, there has also been some positive feedback from other parents, such as those who feel that as parents they often don’t have the time to constantly monitor their children’s online-gaming behavior due to having to work late. No matter which side their parents fall on though, young students who have been blocked from their hobby have already found other ways to get around the system, using their parents’ ID numbers instead of their own to register for the games for example.

Unfortunately, the Cinderella Law initiative, focused mostly on younger students, does not fully address the issue of gaming addiction in Korea. Although the Korean cases of internet and gaming addiction are not linked to cases of murder, such as the case of Columbine High School in the United States, there are many cases of personal and familial neglect that have stemmed from gaming addiction. One of such cases was in 2005 when a 28 year old man collapsed and died after playing the game “StarCraft” for 50 hours straight, with little sleep and few meals. The man, who died in a Daegu hospital after collapsing in a PC room, is said to have passed due to heart failure stemming from exhaustion. There was also another case in 2010 in which a Korean couple pleaded guilty to negligent homicide after their three month old daughter died of malnutrition while they visited PC rooms for extended gaming sessions. Ironically, the game they played, “Prius Online,” involved the raising of a child in the game. Although these types of cases are quite rare, the Korean government has responded by subsidizing programs in hundreds of hospitals and clinics focused on treating gaming addiction, one example being the Save Brain Clinic at Gongju National Hospital.

Although the figures for gaming addiction in South Korea seem relatively small compared to that of the United States, where up to 90% of young individuals play video games and up to 15% of them may be addicted to gaming, and China, where approximately 20 million people play online games, it is still a positive step that the South Korean government is looking into the issue. Along with South Korea, several other countries, including the United States, China, the Netherlands, and Canada have also begun opening treatment centers for gaming addiction. While the threat of gaming addiction looms, the Korean government also cannot deny that in a country of nearly 50 million people, of which more than half are registered for online gaming, the online-gaming industry is an important industry for the country. In 2011, it earned $1.1 billion in exports, more than half of the country’s overseas revenue. Balancing the benefits of this booming industry with its potential cost will likely continue to be a challenge as the influence and benefits, as both a hobby and occupation, continue to grow, particularly for the younger generations, in the most wired country in the world.

Caryn Fisher is the Executive Assistant to the President at the Korea Economic Institute. The views expressed here are her own.

Photo from Rory O’Donnell’s photo stream on flickr Creative Commons.

by Nicholas Hamisevicz

Last month South Korea’s Defense Acquisition Program Administration (DAPA) commissioner Noh Dae-lae stated that DAPA had exceeded its defense exports goals last year and was now attempting to sell over $3 billion defense exports in 2012.  South Korea might have hit that $3 billion mark last year if it won a contract from the Indian Air Force to supply 75 KT-1 fighter aircraft trainers. Despite losing out on the bid, South Korea’s should continue to compete for military acquisition bids by the Indian military and other emerging countries to help strengthen partnerships and enhance its domestic military development.

South Korea is looking to increase its military exports. Shipbuilding has typically been one of South Korea’s main advantages. Last year, Korea was able to win a contract worth around $500 million for eight minesweepers to India to help protect Indian harbors from being mined by enemy submarines.

Korea has also had success in selling fighter aircraft trainers abroad. The KT-1 and the T-50 are the two fighter trainers Korea has pushed in competitive bid selections by foreign countries. Indonesia bought 12 KT-1 fighter trainers in 2001 and signed a deal last year to buy 16 T-50 fighter jet trainers from Korea. Turkey agreed to buy 40 KT-1 trainers as well.

Success in these countries led to the KT-1 competing in India’s bid for fighter trainers. The KT-1 recently came in second behind the Swiss Pilatus PC-7 in this competition. However, South Korea has filed a complaint arguing that Switzerland’s Pilatus Aircraft Ltd. did not submit a maintenance transfer of technology cost assessment (MTOT), giving the Pilatus PC-7 aircraft a cost advantage over the other competitors. The complaint appears to have delayed the Indian Air Force’s process of moving forward with Pilatus, but it will likely be difficult to see the decision reversed and given to the KT-1.

The intense competition to win the fighter trainer contract and the uncertainty around the decision recalls the rejection by India’s Ministry of Defense of the U.S.’s bids from Boeing with its F-18 and Lockheed Martin with its F-16 for the medium multi-role combat aircraft (MMRCA) competition. Dassault’s Rafale fighter recently won this high-profile bid.

The combination of companies trying to win military contracts worth millions of dollars (or billions with the MMRCA bid) and countries attempting to augment their partnerships with a rising India makes these bids even more competitive. India’s desire to strengthen its military capabilities and its history of purchasing equipment and arms from variety of companies from multiple countries will likely remain, keeping competition for military contracts fierce. Winning a large military contract with India helps solidify a country’s strategic partnership with Indian and provide a unique connection that further enhances the relationship between the two countries. South Korea is hoping its new strategic partnership with India would lead to success with its defense exports to the rising power. Winning the minesweeper contract but difficulties with the fighter trainer competition demonstrate the tough aspects of the military acquisition process in India. However, South Korea should continue to pursue military bids in India and create connections with Indian military officials, which will benefit the long-term strategic aspects of their strategic partnership and the enhancement of overall South Korea – India relations.

Picture by Defense Industry Daily

By Chad 0Carroll

Last week the hosts of the world’s most popular political podcast, Naneun Ggomsuda, spoke to a packed audience in Washington DC as part of a tour that also took them to Boston, New York City, San Francisco, and Los Angeles.  Focusing primarily on the satire of domestic South Korean politics, worldwide demand for the podcast is particularly noteworthy as the podcast now has six million listeners worldwide.  Their popularity is the latest evidence that younger South Koreans are using the internet more than ever before to explore their political views.  And as more of them do so, it will become increasingly important for political groups in South Korea to proactively communicate with younger generations online.

South Korea has emerged as the world leader in internet connectivity with nearly 95% of the population now having high-speed access.  This is the result of a significant investment in communications infrastructure, low cost access from intense competition in the market, and the ease of connecting South Korea’s high density population to the web.  But it’s not just households that are enjoying the internet; over twenty million smart phone users in South Korea (nearly half the population) now browse a highly personalized version of the internet on a daily basis.   Taken together, this is leading to fundamental changes in the way people communicate and receive information in South Korea.

Compared to the United States where Facebook remains the main forum for online communication, South Korea has long favored social media platforms that encourage an exchange of personal opinion over merely connecting with friends.   As a result, the ROK is home to one of the world’s largest blogging communities (second only to China), while its Twitter community has an active user rate that is some two times higher than the world average.  In addition, there is significant use of online forums and bulletin-board systems, with many designed specifically to debate politics and current affairs. Deep internet penetration and huge demand for social networking platforms can thus quickly propel issues of relative insignificance onto center stage in South Korea.

A look at recent history reveals some very interesting insights into the interplay between the internet and politics in South Korea.  In 2000, following the shocking defeat of Roh Moo-hyun in a National Assembly election, an online fan club emerged called “Rohsamo” (people who love Roh).  Conducting volunteer work, fundraising and even a viral SMS campaign on the day of the election, the Rohsamo may have played a key role in contributing to Roh’s dramatic 2002 election win.  Another very important contribution to Roh’s victory came from internet news service OhMyNews, a liberal-leaning news service originally built to provide an alternative news source for younger generations “disillusioned with the biased reporting of traditional media”.   It put Roh’s electoral campaign center stage in front of a politically motivated audience that helped draw attention to his candidacy through a number of advocacy activities.

If 2002 represented the start of South Korean social media activism, 2008 marked its evolution with the protests against a resumption of U.S. beef imports.  As the resumption of beef imports was being negotiated, rumor and speculation regarding potential exposure to Mad Cow disease started circulating online, receiving considerable attention even in the mainstream press.  Social media platforms soon mobilized hundreds of thousands throughout the country opposed to the resumption of U.S. beef imports to participate in candlelight vigils, marking the biggest anti-government protest in over twenty years.  Although the vigils’ didn’t end-up stopping the importation of U.S. beef, they did end up leading to a commercial agreement  putting some restrictions in place and a universal offer to resign from Lee Myung Bak’s cabinet.

This year has seen the convergence of social media and political interests continue, with a Twitter campaign being credited with higher than expected voter turnout during the during the April 2011 by-elections .  And in the recent Seoul mayoral elections, social media campaigning may have been the reason political-novice Park Won-soon received three times more votes from younger generations than his GNP rival.”

With presidential elections around the corner in South Korea, the growing convergence of social media and political activism suggests that we should expect significant political interest amongst younger voters in 2012.  While the emergence of an online forum for activists is difficult to control, politicians in South Korea can learn much from the team behind President Obama’s election in 2008.  Their embrace of social media and commitment to reach out to younger generations played a large role in helping propel President Obama’s promise of “change” to young people not just in the United States, but across the globe.

Chad 0Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

Image by Aslan Media

By Chad 0Carroll

Originally known for being a company that sold bargain electronics products, in 1995 Samsung chairman Lee Kun-hee ordered his employees to set on fire a mountain of 140,000 mobile phones, fax machines and other electronics in an effort to reform and rejuvenate the company.  Fast forward to 2011, and in the cell phone market Samsung has gone from being a supplier of low-end, unattractive mobile technology, to becoming one of the key players in a highly competitive smart phone market.  It’s most recent offing, the Galaxy S2, has even outsold Apple’s iPhone in some countries – something that would have been unthinkable just a year or two ago.   But this success has not come without problems, as an increasingly intense and high profile legal fracas with Apple has recently been illustrating.

Since April, Apple and Samsung have been waging an increasingly aggressive legal battle, filing over thirty lawsuits in ten countries around the world.  Apple initiated the proceedings in the U.S., claiming that Samsung’s “Galaxy” cell phones and tablet computers “slavishly” copied its own iPhone and iPad designs and patents. While Apple enjoyed some legal success, banning some of Samsung’s sales (at least temporarily) in Australia, The Netherlands and Germany, it has fared less well in the world’s largest market – the U.S. There, Samsung stalled Apple’s claim that it had exclusive rights to the form of the iPad by showing adjudicators a device eerily similar to the iPad that featured in the 1968 film, “2001: A Space Odyssey”.  And in response to Apple’s legal attacks, Samsung accused it of infringing several of its own mobile technology and user interface patents, most recently articulating in attempts to ban the iPhone 4S and iPad2 in Italy, France Japan and Australia.

Patent disputes such as these are highly common in the tech industry, and even though some of the claims might seem petty or even farcical, they are often pursued with the aim of profiting from the sales of a competitor through settlements that oblige per-unit-payments to the winning party.  However, in this battle, Apple has made clear that it has no desire to coming to any such settlement with Samsung. Instead, it appears that Apple is seeking to prevent Galaxy sales in as many markets as possible, at seemingly any cost.

Part of this obstinacy may be down to the fact that Samsung’s smart phones use Google’s Android, an operating system that Steve Jobs labeled a “stolen” product.  Leaks from his soon-to-be-released biography claim that Jobs said, “I will spend every penny of Apple’s $40 billion in the bank to right this wrong…I’m willing to go thermonuclear war on this.”  Harsh words, but easy to understand when Jobs was the one who witnessed the look and feel of the original Macintosh operating system being so relentlessly copied by Microsoft in the 1980s, much to the damage of Apple’s then business model. And even easier to understand given the suspicious fact that the current Google Executive Chairman and former CEO Eric Schmidt was a former Apple board member and personal friend of Jobs during the time of iPhone development.

The other part of this obstinacy is possibly down to Samsung’s own very close relationship with Apple.  Although both are locked in legal battles, from the get-go Samsung supplied Apple with several key components for both the iPhone and iPad (and continues to), and has thus been in a unique position to know intimate details regarding the hardware and architecture of Apple’s designs. According to this line of thinking, Apple may have seen Samsung as abusing its “insider” position to get a head-start in its own smart-phone and tablet design process.

But is Apple’s position really tenable?  Just yesterday it won a U.S. patent for the “slide-to-lock” feature of the iPhone, opening the door for potentially hundreds of lawsuits with a plethora of manufacturers.  However, in the Netherlands the same patent case failed, because it was proved the “slide-to-lock” feature previously existed on the Neonode N1M phone.  When analyzing the current battle between Samsung and Apple, one has to ask if Apple should really have the right to patent every aspect of its technology.

To be sure, it is understandable to clamp down on companies that fake or clone one’s own technology, but had other companies taken Apple’s approach to patent litigation, where would we now be?  Could Alexander Bell now sue Apple for selling a product that allows users to transmit their voice telephonically, or could the U.S. company Bell, inventor’s of the first push button phone, also sue Apple for creating a touch-screen version of its own invention?

The reality is that the realization of Apple’s iPhone and iPad depended on the ideas and work of many other companies – the technologies these platforms are based on were not reinvented afresh for Apple’s sole purview. And while Apple did a great job in refining these ideas and adding to them, it should not blame Samsung or Android for doing the same with the current menu of cell-phone and tablet technology.  In effect, all manufacturers are moving down a usability funnel, headed to the same shared goal of achieving a perfect interaction between machine and human.

Chad 0Carroll is the Director of Communications for the Korea Economic Institute. The views represented here are his own.

On June 8 – 18, KEI Vice President, Abraham Kim, visited North Korea with a group of American Asia experts.  The purpose of the trip was to analyze the efficacy of sanctions, conditions in the cities/countryside, the integration of technology, the prevalance of cell phones and political conditions.  The slide presentation were shown at the GRS Annual Conference in July 2011 and a forum at Wilson Center in September 2011.