CAD business Korea, Japan, Taiwan

Disclaimer: This document was created in 2000 and has not been revised since.

South Korea is obsessed with telecommunications and the Internet. More than 15 million South Koreans use the Internet with more than 70% making multiple accesses each week. Most indicators show the market to be in a peak growth phase: imports of Internet routing and other infrastructure equipment (a measure of supply-side dynamics) increased 325% in the first-half of 2000 and Internet subscribers are growing at 900,000 per month. By the end of 2000, 20 million South Koreans are expected to be online with 25% using broadband (2Mbps) cable connections. Further significant growth in broadband use will occur as Korea Telecom launches its new fiber-optic linked DSL broadband network later this year. With many of South Korea's poulation living in high-rise apartments pre-wired for DSL, broadband use is predicted to explode in 2001. *2004 note - this is actually what has happened in Japan in the past 4 years with xall new apartments being pre-wired for both ADSL and fiber-optic and average connection speeds soaring from 64kbps ISDN in early 2000 to 40Mbps ADSL and 100Mbps fiber-optic at under US$50/month in 2004!

The South Korean government is extremely commited to expand and improve the broadband infrastructure and has instigated several extensive policies, including the KII-G (Korea Internet Infrastructure - Government) and KII-P (Korea Internet Infrastructure - Public) programs. South Korea includes some 7,000 remote islands and the Internet policies encompass a corresponding variety of land, satellite (South Korea plans to launch an additional 14 communications satellites before 2004) and wireless broadband systems. Additionally the government is investing significantly in regional programs to put business and industrial parks online in its efforts to promote e-commerce.

Wireless ISPs are showing significant growth, partly due to South Korea's dominance of the global mobile phone market. More than 27 million South Koreans subscribe to existing CDMA mobile phone services and South Korea's next-generation mobile system, G3 IMT-2000, is likely to endorse Qualcomm's CDMA2000 technology in an attempt to proliferate integrated wireless Internet use while protecting domestic manufacturers' technology advantage.

The South Korean Internet is extensive (there are about 50% more .kr domains registered than Taiwanese .tw domains) and the general quality of Web sites is high compared to most Asian countries. Most South Korean sites are very graphical with a lot of Javascript and ActiveX apparent, probably a reflection of the strength of broadband access in the market. The growth of the South Korean userbase coupled with the proximity of the Chinese market is presently creating a South Korean e-rush as foreign e-commerce firms establish positions in the market.

Key point: As Internet users become acustomed to broadband connections the demand-side level of expectation increases dramatically (as does the range of supply-side possibilities). The relatively high population density of most Asian countries is creating an active broadband market more rapidly than is possible in the US (where geographic distance tends to impede the proliferation of low-cost land-based broadband infrastructure). It is likely that an ASP CAD CAM solution in South Korea (and Japan, Taiwan, Hong Kong and Singapore) can be significantly more interactive (e.g. streaming 3D content etc.) than in the USA. *2004 note - this has definitely proved the case with the new FOMA wireless standard in Japan pushing even cellular bandwidth to 400kbps. The USA's 'broadband' is rapidly becoming Asia's 'narrowband'.

Key point: South Korea has more mobile phone subscribers than local telephony subscribers (27.5m vs. 21.5m). Coupled with the increasing capability of mobile Internet capable devices there is likely to be a huge opportunity for a wireless "factory floor"/"on the move" service extension to an ASP CAD CAM service in this market (as also in the Japanese market). *May 2004 note - in Japan the leading-edge mobile phone (the NTT DoCoMo SH900i) now offers 400kbps data-transfer, 30fps video-conferencing, Flash3D and an internal auto-focusing 2mega-pixel camera.

Key point: The South Korean government makes significant funds available to local companies to support the introduction of new Internet technologies, including "incubation" funds for new ventures. It may be possible to benefit from government financial support by using an appropriate local partner/structure.

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