Samsung's WiBro Technology Gains Ground in the US Market

Strategic Insights -

Samsung Electronics Co. has taken a significant step into the US market with its wireless Internet technology, WiBro, which is expected to strengthen South Korea's grip on the burgeoning communications market. The technology, based on Intel's WiMAX standard, enables users to log onto high-speed Internet even when they are in motion. Samsung has partnered with Sprint Nextel Corp. and Intel Corp. to develop and commercialize WiBro in America, with Sprint planning to spend up to $3 billion over the next two years to build the network.

Key Takeaways:

  • Samsung's advance into the US market with WiBro is expected to pave the way for South Korea to tighten its grip on the burgeoning market and secure a new profit source, with the market growing to 1.6 trillion won ($1.66 billion) in 2007.
  • The partnership between Samsung, Sprint, and Intel is significant, as it will enable users to access high-speed Internet on the go, and potentially create a new paradigm in mobile communications.
  • South Korean handset makers have complained about paying huge royalties to Qualcomm Inc., which holds most of the patented technologies related to the development of cell phone chips, but WiBro will be free from such burdens, as local companies have patents on most related core technologies.
  • The WiBro market is expected to grow significantly, with the market expanding to 11.6 trillion won by the end of 2011, and creating a total of 33.86 trillion won in induced production and adding around 270,000 new jobs by 2012.
  • Samsung's entry into the US market with WiBro is also expected to promote South Korea's wireless technology worldwide, solidifying its strong position in the next-generation communications sector.

Statistics:

  • The WiBro market is expected to grow to 1.6 trillion won ($1.66 billion) in 2007.
  • The market will grow to 3.8 trillion won in 2008, and 6.6 trillion won in 2009.
  • By the end of 2011, the market will expand to as much as 11.6 trillion won.
  • Samsung expects that its entry into the US market will create a total of 33.86 trillion won in induced production and add around 270,000 new jobs by 2012.

Sources:

  • Yonhap, "Samsung's WiBro advance likely to strengthen South Korea's grip on telecom market" (Aug. 9)
  • Asia Pulse, "Samsung, partners to commercialize WiBro in US" (no date)
  • IDC, Senior researcher Han In-Q, "IDC Expert: WiBro adoption in US would solidify South Korea's position in next-generation communications sector" (no date)