Firms challenged on home turf

Kim Ye-rim, a 29-year-old office worker, had been a loyal user of Samsung`s handsets - until the iPhone hit the local market in late-November.

She had wanted to buy an iPod, but now that the iPhone is available in Korea she is considering purchasing it.

"I am not a tech-savvy consumer. But I want to buy an iPhone," she told The Korea Herald.

Apple, Toyota and other overseas companies are threatening the dominance of local firms, which have long-enjoyed an unrivaled position in Korea`s handset and auto markets.

The new entrants are appealing to local consumers with popular products such as the iPhone and the Camry sedan, which are perceived to be of good quality, sleek design and reasonable price.

Korean consumers are also increasingly frustrated with limited access to globally-popular products here, and want to have a broader choice.

Local firms, especially handset makers and carmakers, have been also accused of taking advantage of their dominance, alledgedly selling their products more expensively at home than overseas and offering products with fewer functions in Korea.

The iPhone is surging in popularity in Korea, with its sales reaching 170,000 units in less than one month since its rollout.

Toyota, which made inroads in Korea in October, also sold 451 Camry sedans in November, which made it the nation`s top-selling foreign car for that month, according to the Korea Automobile Importers and Distributors Association.

The sales of foreign products are still only a fraction of those of local ones, but the explosive popularity of foreign cars and handsets are unprecedented in Korea.

Samsung, Hyundai and other giant Korean firms are feeling the heat.

"I expect local firms to have less clout in the Korean market than before," said Kim Sung-pyo, a researcher at Samsung Economic Research Institute.

"In the end, Korea is part of the global markets. Local consumers buy good products, regardless of their nationality," he said.

More competition coming from outside will help invigorate the local markets, market watchers said. For example, the entry of the iPhone, the popular smartphone, is expected to boost sluggish smartphone sales in Korea, as Samsung has started to aggressively promote its iPhone rival, Omnia 2.

(hjjjin@heraldm.com)By Jin Hyun-joo