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The Honolulu Advertiser
Posted on: Tuesday, July 4, 2006

Ultra-high-tech? Try it on Koreans

By Sara Kehaulani Goo
Washington Post

Paul Jeong, owner of a wireless store in Maryland, sells new Helio cell phones aimed first at the Korean-American market. Marketing firms say Korean-Americans offer a special opportunity for test-marketing.

PRESTON KERES | Washington Post

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WASHINGTON When Helio LLC wanted to market a new $250 ultra-high-tech cell phone this year, it targeted three distinct groups: spoiled teens, tech geeks and Korean-Americans.

Korean-Americans make up less than 1 percent of the U.S. population, but U.S. telecommunications firms take note of them because their kin across the Pacific are among the most tech-savvy people on the planet.

South Korea has wireless broadband service from the subways of downtown Seoul to the country's mountainous national parks. For some time now, the nation's young have used their cell phones more often to send text messages and upload pictures than to talk. Korean adults commonly conduct their online banking with cellular devices, and teenagers spend hours playing video games on their phones.

Some Koreans who come to the United States find it's like going back in time a few years: They have to give up gadgets they're used to. So Helio decided to tap them as a unique market, a laboratory of sorts for germinating products they hope will catch on nationwide.

Marketing firms say telecom companies have always targeted Asian-Americans because they are heavy phone and data users and have lots of international connections. But Koreans offer a special opportunity because of the way they use technology.

"When I was in Korea, I went through so many demos about what they're using (cell phones for), from monitoring your dog's food and water to the electronic wallet," said Gary D. Forsee, chief executive of Sprint Nextel Corp.

Even so, some analysts think the industry's obsession with South Korea can lead to misplaced assumptions. "It's a mistake to sort of religiously adhere to the notion that a market like the U.S. is going to faithfully replicate the Korean experience," said John Jackson, an analyst at Yankee Group who covers the wireless industry. "Are we in a few years going to be consumers who listen to music, download video and broadcast TV on our phones? Of course. But you have to take into account that every market has unique demand-side characteristics, and the U.S. is an extremely diverse market."

There are signs that Americans want to use their cell phones to do more than talk, but so far the numbers are small and segmented. ESPN, owned by Walt Disney Co., has a popular phone that delivers sports scores. Amp'd Mobile Inc., a startup backed by Viacom Inc., Qualcomm Inc. and Intel Corp., is selling a youth-oriented phone with video, music and fancy ring tones. Like Helio, those companies have attracted investors who have poured hundreds of millions of dollars into high-tech phones. Now they must find a slice of early customers and then hang on and wait for the larger population to catch on.