products are becoming more customized to fit the needs of anumber of different target groups, launching products designedfor patients, children and senior citizens.

Samsung Electronics and LG Electronics, major players of theglobal smart watch market, are trying to expand their presencein various ways. The U.S. smartphone giant Apple has recentlyjoined the competition with its Apple Watch, and Samsung haslaunched the Galaxy Gear S2. Meanwhile, LG has continuouslyintroduced new products including the G Watch Rand G WatchUrbane to secure a competitive edge in the global market.

With competition growing fiercer, Chinese smart manufactur-ers are now paying close attention to the smart watch market.Some Chinese companies have recently launched smart watchesat one-tenth of their competitors’ prices. Against this backdrop,the future smart watch market is expected to be divided into twosubmarkets—one for high-end products manufactured by largeconglomerates and the other for low-price products mostly man-ufactured by Chinese companies.

Besides smart wristbands and smart watches, wearabledevices even come in the form of belts, rings and bags. Theinterest in the smart wearable device industry continues to grow,as shown in the fact that companies from this sector accountedfor 17 percent of 3,500 participants in total at the ConsumerElectronics Show 2015. In addition, manufactures are develop-ing more “wearable” and user-friendly products, moving awayfrom traditional wristbands to rings and clothing.

Korea’s information technologies and services, along with itssuperb supporting infrastructure, are recognized worldwide.Such recognition greatly contributes to the national branding of“Korean-made” products. In the past, high-quality Japaneseelectronics led consumers to trust all products made by Japan.

Likewise, Korean IT products have already earned trust world-wide. Combined with the growing trust in Korean-made ITproducts, the so-called Korean Wave has also further boostedthe global awareness of domestic goods. Building on suchopportunities, cooperating with companies all throughout Asiawill create greater opportunities for mutual growth in the globalmarket.

By Ji SungtaeDirector

KIDIA(Korea ICT Device Industries Association) ji4004@kidia.or.kr

The keywords of information and communicationstechnology (ICT) are content, platform, network anddevices. Among them, content and devices are mostclosely related to user experience. With the wide use

of smart phones having led to rapid growth of wearable smartdevices, many share optimism about the future of this market.

Most notably, Apple’s launch of the first iPhone in 2007 ledto the widespread use of smartphones. Soon after, a multiplenumber of other devices including digital cameras, MP3 playersand tablet PCs were combined into a single smartphone. Thismeans that smartphones have evolved from simple phones totruly ‘smart’ devices.

Electronic devices, which used to function individually, arenow communicating and sharing information with each other,unlocking the potential to provide a wider range of functions.Such connection between devices is referred to as “Machine-to-Machine (M2M),” “Internet of Things (IoT),” or “Internet ofEverything (IoE)—all of which mean that various devices in ourlives not only provide information but also collect, process andanalyze such information to maximize the convenience of users.

The number of connected devices per person is already quitehigh, and is expected to grow continuously from 3.47 in 2015 to6.58 in 2020, according to KT Economics and ManagementResearch Lab. Many people use laptops, tablet PCs, Bluetoothearphones and other devices on top of their smartphones anddesktop computers. As new devices such as selfie sticks, smartwristbands, smartwatches, drones and other wearables continueto appear, the number of devices owned per person is steadilyrising.

In Korea, large conglomerates have led the growth of thedomestic smart device market and are gaining global competi-tiveness. The domestic market is now entering the ‘maturingphase’ for second-generation devices (i.e. PDAs, smartphones,tablet PCs), while newly-developed, third-generation devices(i.e. wearable devices, IoT devices) are leading the change. Inorder to promote the smart device industry as a new nationalgrowth engine, the Korean government announced a number ofinitiatives, including the Next-generation Smart Device Korea2020 (2014) and the K-ICT Smart Device Promotion Plan(2015) to promote further growth. Such initiatives by the gov-ernment are just some of the reasons why many share a brightoutlook for the industry.

One of the most widely-used wearable smart devices is thesmart wristband or smart band. Smart bands in the early stage,such as Jawbone and Fitbit, were perceived as costly gadgets.This perception changed with the introduction of products likeMisfit Shine, which promoted itself as an accessory rather than adevice and offered other options at lower prices. Most recently,Xiaomi caused a seismic change in the global smart band mar-ket by offering its Mi Band at one-tenth the price of existingsmart bands. The price range of the early smart bands stoodaround KRW 200,000 (USD 180) and began to gradually dropuntil Xiaomi gained an unrivalved competitive edge. Other late-comers from China have also joined the global race, loweringthe overall price of smart bands. As a result, low-price smartbands are now readily available in overseas e-commerce web-sites, such as Alibaba, for as low as USD 10.

In order to respond to such changes in the global market,domestic manufactures are making efforts to diversify and cus-tomize their products to survive in a market that has becomeincreasingly more reliant on ‘red ocean’ strategies. For example,

December 2015 l 54 l December 2015

Industry

The Present and Future of Korea’s Wearable Smart Devices

Korean businesses are seeking to gain a competitive edge in the wearable smart device market

Number of Internet-connected devices (left) and number of devices used per person (right)

Devices by generation

Source: Korea ICT Device Industries Association (November 12th, 2015). <Development of IT-convergence devices and changes in daily life>

Category

Smart band

Smart watch

Smart bands and Smart watches

Smart wristbands and smart watches

Source: Official websites of each product

Source: KT Economics & Management Research Lab (December 2014). <Changes in marketing due to the penetration of smart devices>

Category

Band-typedevices

Belts andjewelry

Infantmonitoring

devices

Types of wearable smart devices

Types of smart wearable devices

Exercisemonitoring

devices

Source: Official websites of each product