Discussion with Derek Lidow, CEO, iSuppli
[ Daniel Seo 2006-05-29 ]  
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SEOUL, Korea (AVING Special Report on 'SDF 2006') -- <Visual News>

Discussion with Derek Lidow, CEO, iSuppli

Profile, DEREK LIDOW
President & CEO, iSuppli Corp, company which serves the critical need for data and analysis that can improve the performance of the global electronics industry value chain. Mr. Lidow is also acknowledged to be one of the world experts on the global electronic industry.

“When I was here 2 years ago the Korean LCD industry was about to be overtaken by the Taiwanese LCD industry. This is now true, also happening in other major IT industries in the marketplace. The market share charts show comparisons of Korean & other marketplaces in the world. It shows the erosion of Korean market share in the world marketplace, and taking into account the forecasts of Korean market share by year 2007, Korea will not be able to regain top spot. In the LCD sector, Japan now has the top market share, but this is in the process of eroding. The fastest growing markets are the combination of partnerships between Taiwanese and Chinese partners. In 2005 these continued to gain global market share. Computer monitor production in Korea peaked in 2002, with continued erosion until 2005- caused in part by competition from Taiwanese production.

Some say, Korean companies should continue to develop their brand image. North American brand names such as Dell and Hewlett Packard have pushed out Japanese brands in the global marketplace. In wireless handsets, there has been resurgence in European & North American competitiveness.

The Top 2 global handset platform companies sold more than 200 million dollars worth in 2004: these being Nokia and Motorola. The Top 2 Korean companies sold only 40 million worth. They need to focus more on their product line to make them far more efficient. The marketing effectiveness of the Top 2 Global Players improved even faster. The marginal effectiveness of the Top 2 Global Players is more than 4.5 times higher than the Top 2 Korean players.

Across a wide spectrum of IT product lines Korean competitiveness is getting weaker versus Taiwanese, Chinese, European and American companies. The problem with Korean companies is that they are being outspent and out marketed and dialogued between government and industry. There needs to be more active investment in high-risk areas. Innovation & ability to try ideas that might not work must be encouraged. The advantages of Korean IT sector are operational effectiveness, and cost versus productivity effectiveness. Korean companies also show high competitiveness in semi-conductor and handset industries. Samsung, a key supplier of semi-conductors, has the lowest cost structure and highest yield.

Korea has a 5 year advantage versus other nations, and it should make use of this to develop new products, media and contents and incubate new ideas.

The average price of cell phones and the growth rate in sales are dropping just as fast. Market revenues decelerated just as fast. Consumers are becoming more effective shoppers. Spending patterns are changing from paying for content rather than paying for hardware. The strategy is to use content as the opportunity and hardware as the facility.

An example of hit products in varied form would be the Motorola razor phone. The Korean infrastructure and company competitiveness is strong, and the key is to have hit products, hit design, and products which are fun to use and to accentuate the fun.

<AVING Special Reports Team for Seoul Digital Forum 2006s: Caleb Ma, Paul Kim, Julie Youn, Rose Kim>

Global News Network 'AVING'
by Daniel Seo (www.aving.net)

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