SK Telecom Taking On iPhone

South Korea’s incumbent wireless operator SK Telecom (SKM - Analyst Report) is boosting its handset portfolio to take on Apple’s (AAPL - Analyst Report) iPhone, which was launched recently by its rival KT Corp (KTC) in the country.

SK Telecom has announced its plans to market Motorola’s (MOT) Droid smartphone. The company is expected to launch the novel device, dubbed the latest "iPhone-killer," as early as January 2010. SK Telecom is also negotiating with Research In Motion (RIMM - Analyst Report) to market the new BlackBerry Storm 2 and BlackBerry Bold 9700 smartphones in 2010.

Moreover, SK Telecom is planning to add Android phones from leading Taiwanese smartphone manufacturer HTC in its smartphone line-up. This demonstrates the company’s continued effort to strengthen its leadership in the Korean handset market.

Motorola Droid, which runs on the latest version of Google’s (GOOG - Analyst Report) Android operating system, is currently the biggest challenger to iPhone. The device was recently introduced by Verizon (VZ - Analyst Report) in the US and is expected to sell 1 million units alone in 2009, reflecting a strong market response.

The BlackBerry Storm 2 is an enhanced version of the original Storm, and has several advanced features such as added Wi-Fi (wireless broadband), web browser, email, multimedia, integrated GPS and social networking. The BlackBerry Bold 9700 represents an improvement over its predecessor BlackBerry Bold 9000 with a slimmer look and a more powerful processor. SK Telecom launched the current version of BlackBerry Bold in South Korea in late June 2009.

SK Telecom is the leader in the Korean wireless market, enjoying approximately 51% market share. Increased adoption of smartphones and associated data services continue to boost ARPU (average revenue per user) and the company’s 3G customer base.

However, competition has increased in the Korean mobile market due to the consolidation of KT Corp and its wireless unit KT Freetel in June 2009, and is further exacerbated by the recent iPhone launch. As such, SK Telecom faces greater challenges in retaining wireless market share moving forward.
 
To protect its market share and further strengthen ARPU, SK Telecom has launched several handset models in the current year and also introduced diverse mobile applications. The company launched T Store, the first mobile open market in Korea, in September 2009. This on-line store features applications that are optimized for smartphones and other select regular handsets.

In preparation of the upcoming launch of the new smartphones, SK Telecom is expanding its retail distribution network in the metropolitan areas. The company also plans to add Android application marketplace to T Store, which currently only offers applications for Windows Phone-based smartphones.

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