Nurture local software habitatInformation technology manufacturers are primary drivers of the Korean economy. They accounted for 20 percent of economic growth in the decade before 2008, but that rose to 30 percent after that year’s global financial crisis. Without their stunning performance, the country’s gross domestic product would have barely grown over 4 percent last year instead of the 6.2 percent growth it achieved.
But technology manufacturers are facing increasing challenges this year. Samsung Electronics and other leading electronics makers have been under attack by their global rivals. Apple has stepped up its offensive with a bombardment of patent lawsuits against Samsung Electronics. Other technology giants Microsoft and Oracle also joined the patent war.
And this week, Samsung Electronics was broadsided by its software partner Google, which announced a plan to buy Motorola Mobility Holdings, turning it into a direct competitor in the smartphone and tablet market. Google’s acquisition of Motorola will impact Samsung and LG Electronics as a number of their phones use the Android operating system. The deal may bring Samsung and Apple closer but there are significant downsides.
Only one thing is for sure - the global mobile software market has turned more competitive and uncertain. If Google bestows preferential treatment to Motorola in software technology, Android players like Samsung and LG will naturally lose out. The solid Android front that helped to contain Apple’s ascent could be shaken. Today’s enemy could be tomorrow’s business partner in the software world, and local IT manufacturers can do little but wait and see.
The deal between Google and Motorola demonstrates unpredictability in the software and technology market. The market can change overnight. Only a few years ago Motorola was a global frontrunner in the mobile phone market, sharing it, more or less, with Nokia.
Local companies must learn a lesson from the Google-Motorola deal. They, too, could be gobbled up if they do not keep up with the times. Korean companies have weathered numerous challenges to get to where they are now, and they now face another test.
The latest deal reaffirmed that in the information age, software is king. No matter how many handsets and digital devices are made, they cannot run without software.
Google and Apple are the winners at the end of the day. We must nurture our own software habitat - and fast.