Korean iPod Market Share and xenophobia

Apple Computer Inc. is strengthening its presence in the local digital music player market, a segment dominated mostly by Korean companies, thanks to the company’s low-cost approach on its best-selling products.

According to a survey by online electronics retailer Danawa Corp., Apple Computer’s iPod music players accounted for 7 percent of the local market by revenue as of the first two-weeks of March.

Danawa estimates iPods market share by units to be well over 10 percent, considering that Apple’s products are sold in far-less fewer stores compared to those of their Korean counterparts including ReignCom Ltd (Iriver). and Samsung Electronics Co.

According to U.S. market researcher iSuppli Corp., global MP3 player shipments will reach at around 57.7 million units this year from 36.8 million units in 2004. Apple Computer is believed to have controlled about 50 percent of the global MP3 player market last year.

According to industry figures, products by Korean MP3 manufacturers accounted for about 20 percent of the global market last year, dropping from 33 percent in 2003 and 41 percent in 2002, with the rise of hard-disk products made by U.S. companies such as Apple Computer and Creative Technology Ltd.

Reigncom is the world?¢‚Ǩ‚Ñ¢s number one in MP3 players with flash memory sticks, while Apple leads the world with the hard drive disk (HDD) players. But recently both transgressed on each other?¢‚Ǩ‚Ñ¢s patch, with Reigncom releasing an HDD player and Apple a flash memory machine.

Late last year, Reigncom put out the iRiver H10, a five-gigabyte HDD model, after 10 months of research and development, to challenge Apple?¢‚Ǩ‚Ñ¢s iPod mini. Weighing 100 grams and about the size of a business card case, the iRiver H10 can store up to 1,200 songs, 200 more than the iPod mini. It is equipped with a 1.5-inch color liquid crystal display (LCD) screen, so that users can look at digital pictures or read e-books while listening to music. At the 2005 International Consumer Electronics Show (CES) in Las Vegas, Microsoft CEO Bill Gates named the iRiver MP3 player as an outstanding product. Reigncom says its primary goal is to break Apple?¢‚Ǩ‚Ñ¢s dominance in the MP3 player market.

But Apple is not just sitting back, putting the iPod shuffle, a flash memory MP3 player, on sale in Korea last Thursday. The version with 512 megabytes of memory is priced at W125,400, and the one-gigabyte model is W189,500. This consolidates a shift in Apple?¢‚Ǩ‚Ñ¢s marketing strategy away from the classy, high-priced brand image of the past. The iPod shuffle abandons LCD screens, and music is played with just one button. It can also serve as a USB flash memory stick. The biggest advantage is that it is simple to handle, allowing older, less tech-savvy people to use it. Unsurprisingly, it targets the same customers as the iRiver N10.

In South Korea, the 1GB Shuffle will cost only 60% of the equivalent ReignCom model, even after the price cuts. In fact, the 1GB Shuffle costs considerably less than the Korean company’s 512MB model.

However, the Shuffle is not expected to be a huge seller in South Korea, where features are all-important. The Shuffle lacks a display and a radio tuner, for example.

Does shouting “mansei” buck-naked make Korea independent? US firms are sweeping up most of the world?¢‚Ǩ‚Ñ¢s HDD-type MP3 player market… As a sovereign MP3 state, we could not simply sit back and watch … After spending countless nights in the research room, we?¢‚Ǩ‚Ñ¢ve finally produced a precious son for the world market… There will be many difficulties, but we are not afraid … We are the descendents of martyrs who braved bullets and swords to bring about independence to the cry of “mansei.”