The burgeoning success of the Apple iPhone in Korea is contributing to a major change in the local mobile phone market. Until now, the market has been split between Samsung Electronics and LG Electronics and centered on general cell phones sporting sophisticated features. But with the iPhone at the forefront, the market focus is rapidly shifting to smartphones.

◆First Successful Foreign Cell Phone

As of Friday, some 400,000 iPhones had been sold in Korea since its launch here on Nov. 28 last year. "Samsung and LG rose to dominate the local market so heavily that Korea had become known as a 'graveyard' for foreign cell phone brands," a Korea Communications Commission official said. "The iPhone is the first successful foreign cell phone since the turn of the millennium."

Now other smartphone makers have set their sights on the Korean market: Motorola, Nokia, Sony Ericsson, HTC and RIM all have plans to expand their presence here by unveiling new models with advanced features. In 2008 smartphones accounted for a mere 0.9 percent of the domestic mobile phone market, compared to 11.4 percent in the global market. But the figure rose to 2.2 percent in 2009, and is likely to soar to the 20 percent level this year to match the trend of the global market.

◆ The Revival of Wireless Internet

The rise of smartphones is also reinvigorating the wireless Internet market. According to data from KCC, as of the end of January, smartphone users used an average of 107 megabytes of wireless data per month, 25 times more than the 4.3 megabytes of general mobile phone users. Given the potential, mobile operators are investing heavily in the wireless Internet business. SK Telecom, which had been relatively inactive in the sector, plans to establish its own wireless LAN network this year.

Meanwhile, the App Store, which is the online marketplace for iPhone applications, is creating new opportunities for local developers. The store enables them to directly deliver their applications to millions of iPod and iPhone owners around the globe without going through mobile carriers. The number of local developers has surged to over 2,300 from 1,400 since the launch of iPhone here.

◆ A Blow to Domestic Handset Makers

While the iPhone has been a boon for some, it has been a bane for others, particularly local handset manufacturers. Samsung's share of the local cell phone market tumbled from 56 percent in October of last year to 49 percent in December, and LG's share dropped from some 30 percent last year to around 20 percent last month.

But the two electronics giants are striking back. Samsung has unveiled its own smartphone platform called Bada, and this month will release smartphones featuring the Android operating system developed by Google, one of Apple's top rivals. LG, which was the first local manufacturer to launch an Android phone, will unveil about 10 smartphone models this year.