[Graphic News] Korea seen as technology winner

A fast-rising technology pioneer and the home ground of Samsung ― these are what come to mind when citizens of 17 major countries think of South Korea, according to a recent survey by Korea’s Ministry of Foreign Affairs.

Respondents in India, Vietnam and Turkey were the most favorable toward Asia’s fourth-largest economy, while those in Poland, Germany and Egypt had relatively negative impressions.

The corresponding survey was conducted last October with an aim to devise customized regional diplomatic strategies and thus to step up Seoul’s public diplomacy in line with its growing leverage in the international community.

The list of keywords, apart from technology and Samsung, also included war and Psy or his hit song “Gangnam Style,” the survey showed.

Samsung most popular smartphone brand in emerging markets: survey

South Korea's tech giant Samsung Electronics Co. is the most popular smartphone brand in a handful of emerging markets, a survey showed Monday, outdoing rivals at home and abroad such as Apple Inc. of the United States and local competitor LG Electronics Inc.

In the poll conducted by Credit Suisse Research Institute on 15,873 users from nine emerging countries -- Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey -- around 30 percent responded that given the choice, they would buy a Samsung smartphone.

Saudi Arabia held the highest preference for Samsung-made products at 57 percent, trailed by Turkey, Brazil and China at 46 percent, 42 percent and 38 percent, respectively. India and Russia held comparable figures of 31 percent and 27 percent, while that of Mexico came to 22 percent.

The world's No. 1 smartphone maker, however, posted weak results in South Africa and Indonesia, as such markets are currently dominated by Finnish Nokia Corp. and Canada-based Blackberry Ltd.

Samsung's brand penetration improved in 2013 from a year earlier in the observed markets, the poll said. Brand penetration refers to the portion of people who purchased goods made by a specific brand at least once over a given period.

While Samsung's handset brand penetration improved in most of the surveyed nations, figures also went up for its TV models in five emerging countries. Its computers also earned higher market recognition in China, Saudi Arabia, South Africa and Turkey.

LG Electronics Inc. improved its market presence in Mexico, Russia and Turkey for smartphones, while its computers also tapped deeper into Brazil, Indonesia, Saudi Arabia and Turkey. (Yonhap)

Smartphone users expected to hit 2.5 bln in 2015: research

The global number of smartphone users is expected to reach 2.5 billion by the end of 2015, research showed Monday, as more tech players are releasing low-end models to appeal to wider markets.

Around 34.7 percent of the world's 7.2 billion population estimated for 2015 will use smartphones, an industry tracker Strategy Analytics's report showed, which had said the number surpassed the 1-billion mark in 2012.

Industry watchers attributed the rising number to the expansion of low-end smartphones released by global players, which helped them tap deeper into emerging markets, particularly in Asia.

While Strategy Analytics did not release detailed figures, it said the Asia-Pacific region held the most number of smartphone users, while Europe and North America held the highest portion of people holding the high-tech handsets among all mobile phone users.

According to a separate data compiled by Sweden-based Ericsson, the number of the world's smartphone users reached 1.9 billion at

end-2013 and is set to expand to 3.3 billion by the end of 2015, painting a brighter future for the industry.

Despite the rosy outlook for the smartphone industry, however, the world's No. 1 smartphone maker, Samsung Electronics Co., posted a dull estimate for its second-quarter earnings, citing rising challenges in its mobile business.

Analysts said Samsung likely lagged in earnings from the low-end models amid tighter battles with Chinese firms, with the South Korean firm failing to differentiate itself from its rivals.

Samsung's high-end models also suffered, as the combined shipment of the latest Galaxy S5 is estimated at 17 million units over the April-June period, compared with 20 million units for the Galaxy S4 in the three months after its launch.

LG Electronics Inc., Samsung's smaller South Korean rival, however, said last week it has been making significant strides in the global handset market with its G3 model. Its mobile division shipped a record high 14.5 million units of its smartphones in the second quarter, up 20 percent from 2013.

Pantech Co., the country's smallest player, was placed under a debt workout program in March after suffering financial difficulties, and is seeking help from creditors and local mobile carriers, holding a limited leeway to seek its market expansion. (Yonhap)

U.S. Chamber of Commerce chief urges FTA implementation

The head of the U.S. Chamber of Commerce on Thursday called for the faithful implementation of the free trade agreement between South Korea and the United States to improve the global competitiveness of both countries and their business communities.

“The headline numbers for U.S. exports to Korea are less impressive,” said Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, during an American Chamber of Commerce General Membership Meeting here. 

“For Korea to be truly recognized as an FTA leader ― and a good and reliable FTA partner ― it needs to put higher priority and more effort into full implementation of these agreements.”

Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, speaks during a general membership meeting of the American Chamber of Commerce in Korea held in Seoul on Thursday. (AMCHAM)

While admitting that Koreans are buying more U.S. services and a wider range of agricultural products, Donohue noted specific sectors that need more work. 

He said in some cases ― mainly in sectors such as autos, rules of origin, financial services, pharmaceuticals and medical devices, and digital commerce ― “things are moving too slowly.” 

Other sectors in which nontariff barriers are restricting trade, or in which new rules or guidelines are required to meet the requirements of the Korea-U.S. FTA are also showing sluggish improvement, Donohue said. 

“Why (is it that) Korean safety tests to evaluate certain automotive components are not used anywhere elsewhere in the world? Why are the methodologies used to determine reimbursement rates for medical devices not used in any other major market?” 

Donohue said local business practices should be in line with those of other major economies to help build confidence among U.S. and other foreign investors. 

On a positive note, he forecast that Korea would face relatively lower hurdles in joining the U.S.-led Trans-Pacific Partnership agreement, owing to its existing FTA with the U.S. 

“It makes abundant sense for Korea to join the TPP at the appropriate time,” he said. “I’m confident that the American business community and our political leaders would support Korea’s entry into the TPP.”

By Park Han-na (hnpark@heraldcorp.com)

[Graphic News] In-house reserves surge

The in-house reserves accumulated at South Korea’s top 10 business groups reached 515.9 trillion won ($499.66 billion) as of the end of the first quarter this year, according to a report released by corporate tracker CEO Score on Wednesday. 

The figure reflected a 90.3 percent increase from the 271 trillion won recorded five years ago, CEO Score said. 

In-house reserves refer to a company’s capital surplus excluding tax payments and dividends, which are reserved for future investment. 

Samsung Group saw its in-house reserves rise by the biggest clip, followed by Hyundai Motor, SK and LG. In-house reserves have recently become a bone of contention following new Finance Minister Choi Kyung-hwan’s hints that he may seek taxes on the reserves, to the dismay of local corporations.

Sales of Galaxy S5 fall behind iPhone 5s in May: report

Samsung Electronics Co.'s Galaxy S5 saw its monthly sales fall behind Apple Inc.'s iPhone 5s in May, a report showed Tuesday, reflecting the market's dull reaction to the new Galaxy lacking cutting-edge features.

Apple's latest flagship product, launched in September 2013, ranked first on a list of the top 10 most-sold smartphones around the globe last month, outselling Samsung's latest Galaxy model, which only commenced official sales in April, the report released by Hong Kong-based researcher Counterpoint showed.

"Apple's iPhone 5s continues to be the best-selling phone in the world, a spot that many expected to be taken by Samsung's Galaxy S5," the report said. It did not provide detailed figures on the respective models, but added the research was conducted in 35 countries.

Samsung's Galaxy S4 and Note 3 ranked third and fourth, respectively, the report also showed. The two were trailed by Apple's iPhone 5c and iPhone 4s. The South Korean player's Galaxy S4 mini and low-end Galaxy Grand 2 were also included in the top 10.

While Samsung and Apple dominated the rankings, China-based Xiaomi had two models, the MI3 and Hongmi Redrice, in the seventh and ninth spots.

"Outside of the top 10 list, Sony's Xperia Z1 came in close. Motorola's Moto G, along with Huawei's Honor 3C and LG's G2, made it into the top 20. Next month, we expect to see the Nokia X in the ranks of best sellers as it is moving up fast after just two months of sales," Counterpoint added.

The researcher said based on the May figure, the sales of phablet models, a cross between smartphones and tablet PCs which features wider displays, will continue to grow in the near future.

Samsung's Note 3, Galaxy Grand 2, and Xiaomi's Hongmi Redrice are categorized as phablets.

"There are now three phablets in the top 10 list, which reflects the ongoing trend of larger displays," Counterpoint said.

"Almost 40 percent of the smartphones sold in May were phablets...If Apple comes out with a phablet later this year, it will instantly become a hit and top the list of phablets within two months of availability."

Last week, Samsung, the world's biggest technology firm by revenue, estimated its second-quarter operating profit at a sharply lower-than-expected 7.2 trillion won ($7.07 billion) amid a slowdown in its smartphone business.

The estimate represents a 24.4 percent fall from its operating profit of 9.53 trillion won last year. Analysts here attributed the sluggish earnings to slow sales of Samsung handsets, both at the low-end and high-end levels. 

Despite a built-in heart rate monitor, fingerprint security and

water- and dust-resistant features, industry watchers have been raising concerns that the new Galaxy lacked an innovative touch, which really matters to consumers.

The combined shipment of the Galaxy S5 is estimated at 17 million units over the April-June period, compared with 20 million units for the Galaxy S4 in the first three months since its launch.

Analysts added that over the next three-month period ahead, sales estimates for the Galaxy S5 stand at 6 million units, which compares with 16 million units for the Galaxy S4 over the same period.

Samsung is estimated to have shipped 79 million smartphones in the second quarter, compared with 89 million in the previous quarter. (Yonhap)

Korea’s move to sell IBK stake falls apart: sources

South Korea’s planned sale of part of its stakes in the Industrial Bank of Korea fell apart recently, sources said Friday.

The government planned to sell about 23 million shares of its stake in IBK through a block deal on Thursday in after-hours trading, according to the sources. The deal was estimated at around 300 billion won ($290.3 million).

The government confirmed that the deal fell apart but did not elaborate on the reasons. A finance ministry official told Yonhap that it was natural that a deal fails when conditions are not met. 

The official said negotiations were still ongoing to rearrange the sale.

Market sources speculated that a legal issue may be the major reason, saying allegations that the IBK had violated sanctions on Iran prompted a U.S. bank to withdraw from the selling process. The ministry denied the speculation. (Yonhap)

34 local companies subject to corporate restructuring

The Financial Supervisory Service said Sunday it has given credit risk ratings to 34 companies including 21 construction firms, subjecting them to restructuring programs. 

The country's top financial regulator and creditors regularly inspect companies with debts of 50 billion won ($48.54 million) or more to assess their risk levels. This year, 34 companies were given the bottom two ratings of "C" and "D," they said.

Eleven companies, including four construction companies, a shipbuilder and a steelmaker, have been categorized in the group C, which must reach agreement on a workout schedule with their creditors.

The other 23 firms were put in group D, which are unlikely to be helped by creditors, forcing them into court receivership. This group includes 17 construction firms and two shipbuilders, according to the FSS.

The companies in the bottom-two rating groups have taken out a total of 3.5 trillion won in loans, the FSS said. (Yonhap)

S. Korea, China make headway in latest round of FTA negotiations

South Korea and China have made a small but clear breakthrough in the latest round of negotiations for a bilateral free trade agreement (FTA), reaching an agreement on how they will pursue liberalization of their service and investment markets, the South Korean government said Friday.

"Regarding the service and investment sectors, (the two

countries) reached an agreement in principle on the way of market liberalization that had been one of the largest remaining issues,"

the Ministry of Trade, Industry and Energy said in a press release.

The 12th round of South Korea-China FTA negotiations was held in Daegu, 300 kilometers south of Seoul, from Monday through Friday.

The talks marked the first of their kind since a summit between the countries' heads of state earlier this month in Seoul, in which the two repeated their call for the conclusion of the FTA negotiations before the end of the year.

Under the latest agreement, the countries will first introduce a positive list approach for their bilateral trade in investment and service areas, in which they will list items and areas that will be liberalized.

But they have "agreed to switch to a negative list approach"

within a certain period following the implementation of the proposed FTA, the ministry said. In a negative list agreement, all items and services will be liberalized except only those named.

The ministry said the two sides have also made significant progress in areas of regulation and cooperation.

"The sides have come to a complete agreement on the text of a chapter that deals with competition and electronic commerce while also making significant progress on the text for the environment chapter," it said.

"They have also made meaningful progress in the areas of customs procedure, economic cooperation and government procurement."

South Korea and China began their FTA negotiations in May 2012.

China is already South Korea's largest trading partner, accounting for nearly one-quarter of South Korea's overall exports in 2013. (Yonhap)

Korea asks trade partners for cooperation in rice tariff talks

South Korea has asked its major trade partners including China and the United States for cooperation in its upcoming negotiations to set tariff rates on its rice imports, the trade ministry said Sunday.

South Korea on Friday announced that it will open its rice market to tariffed imports, ending a 20-year waiver that had capped the import of the grain to a set minimum. It now has to negotiate the tariff rates with the World Trade Organization before the market opening from Jan. 1 next year.

In a bid to discuss cooperation in future talks, South Korea's Trade Minister Yoon Sang-jick held a series of bilateral meetings with his counterparts from the U.S., China, India, Canada, Australia and France on the sidelines of a meeting of trade ministers from the Group of 20 nations held on Saturday in Sydney, the ministry said.

During the meetings, Yoon explained his government's policy on the tariffication of the rice market and asked his counterparts to support South Korea in the negotiations with the WTO, the ministry said.

In addition to the rice market, Yoon also discussed other pending economic issues with the trade ministers, the ministry said.

Yoon and his counterparts from Australia and Canada agreed to cooperate to bring their bilateral free trade agreements into force.

In talks with his Indian counterparts, Yoon discussed follow-up measures to honor agreements reached at the South Korea-India summit in January, the ministry said. (Yonhap)