A model poses with a solar e-book reader developed by LG Display. South Korean electronics and telecom firms are jumping into the e-book businesses by realigning and developing strategies, though the short-term outlook is murky due to lack of content and copyright issues.                                                             / Korea Times File

Korean electronics majors and leading local telecom carriers are drastically reshaping their corporate strategies for the "e-book leadership."

To secure their bottom lines in the promising sector locally, and to challenge Apple Inc's iPad, the Korean companies are developing strategies, hoping to capitalize on new interest in a category of gadgets that was moribund until recently, officials said Monday.
Samsung Electronics, the world's biggest technology company but being criticized over the lack of "creativeness" on its key portable devices, plans to increase its spending for the business at least 10 percent more in 2010 from the previous year.

"Samsung has been engaged in detailed talks with several overseas content companies for more shares," a company spokesman Kim Se-hun, said adding it will introduce more e-book devices into the global market from April.

"That market is highly attractive. Partnership with a local bookstore of Kyobo isn't enough. We need more," Kim said without elaborating further. Currently, Samsung has the content partnership with Internet giant Google Inc.

Samsung officials told the newspaper that the iPad is a benchmark and they say the company is seriously considering what new devices to develop to e-book readers that currently have limited Internet access.

Samsung's local rival LG Electronics has also joined the ranks of the "e-book frenzy" with the new e-book strategies.

A senior executive at LG Electronics said it will expand its e-book portfolios with the help from its flat-screen affiliate LG Display.

"LG will launch a new product in April to take on Apple and Amazon. The product will be revolutionary," the executive said, citing LG Display's production ramp-up of e-papers.

LG Display is heavily betting on e-paper business at a time when most of major PC makers are jumping into the e-book market. The world's No. 2 flat-screen maker is supplying e-papers to Sony of Japan and Iriver.

"E-book and e-paper markets have higher potential. LG Display plans to increase our e-paper share to 20 percent by the end of this year. The partnership with PVI is just a starting point for us," an LG Display spokesman said.

An e-book is a digital device, helping users to read books in a five- or six-inch flat-screen. Steve Job's sexy iPad has had mixed reviews.

But iPad will cannibalize existing product categories of netbooks, smartbooks, e-book readers and mobile Internet devices, analysts say.

E-books are expected to take up 20 percent out of the total publication by 2012 from an estimated 5 percent this year, locally, data given by the Korea Electronic Publishing Association (KEPA) showed.

KEPA said the sector itself will rise to 2.40 trillion won by volume from 1.6 trillion won during the same period.
 

Korea: Infant Stage
Although the market itself is rapidly growing, the lack of the right content for e-books is still regarded as the major drawback.

Major local manufacturers of e-book devices such as Samsung, LG and Iriver are hoping for the global shares with the tie-up with Google or Yahoo.

Although, more works are under way, the South Korean e-book market is still in an "infant stages."

Kyobo Book Center is taking the way. But even Internet book sellers such as Inter Park, Aladdin and Yes 24 are just came into the sector.

Cash-strapped local publishers are highly reluctant for the sector because of skeptics over profits and initial development costs.

In line with the overall situation, analysts and company officials cite "content" as the critical factor for the smoother expansion of e-book businesses. Due to higher worries over copyright issues, content providers are passive to expand their content distribution channels.

Digital Kyobo Book Center ? the online version of the local book seller ? was securing 60,000 electronics version of books. But that's just 20 percent of the content owned by Amazon.

South Korea's publishing market has been ranked as the world's fifth-biggest by market size. But the market itself still lack of diversification, which is another reason to hamper the expansion of the e-book market.

"Books for kids and educational purposes are taking up the most of the pie for the local book market. Also, publishers are reluctant to jump into the e-book sector due to heavy costs in content and copyright woes," Yoo Young-shin, a chief of the company's digital content team, said.

Despite such tough market situations, a South Korean telecom major SK Telecom is planning to advance e-book market in the first half of 2011.

"We will launch 4-inch color e-paper in the first half of next year. SK Telecom has in minds to get royalties from companies using our technologies," a company spokeswoman Cindy Kang said.

SK Telecom has recently developed a key component of e-paper and electronic operating technologies.

"Without the content, the success of e-book businesses is out of question," a high-ranking industry official said.

"I think what this signals is that content is going to have more pricing flexibility over time rather than less, because frankly, the only thing that drives iPhones, iPads, Kindles, Zunes and other kinds of devices is content," according to the official.

Observers are positive over the mid- and long-term outlook for e-books, referring to the boon for smartphones.

The steady and healthy demands for smartphones are pushing handset vendors and telecom carriers to inject more on application stores.

"E-book users may get further chances to experience various contents from application stores thanks to the 'smartphone frenzy.' But the works over the issues of copyrights and distribution structures should be preceded," a KEPA spokesman said.

In overseas, Apple Inc has reduced the price for e-books. That could change the global e-book market, which has seen prices remain relatively static despite rapid evolution in technology.

Officials are calling for the South Korean government to allocate more budgets for the local e-book sector as long as to keep publishers, manufacturers and content providers to take long views on the businesses.

"We are willing to accept lower return for e-book sales as we control the value of our product ? books, and content in general. We're taking a long view on e-book pricing, and this new model helps protect the long-term viability of the book marketplace," Yoo of Kyobo said.

Inspired by the new wave seen in the local book industry, Kyobo is planning to open its wireless store. Kyobo said the store will be equipped with sci-fi, comic and other entertainment materials.

A U.S.-based consultancy PWC forecasts the global e-book market to grow by $8.9 billion in 2013 from an estimated $2.5 billion in 2010.

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