Computer Software
Republic of Korea
Overview
2004 2005 2006 (estimated)
Total Market Size 887 960 1008
Total Local Production 349 388 411
Total Korean Exports 95 98 101
Total Imports into Korea 633 670 699
(Unit: USD million)
[Source: The above statistics are unofficial estimates by Commercial Service Korea for the packaged software market.]
[ USD1= 1,200 Won (2004), 1,100 Won (2005), 950 Won (2006) ]
The Korean market demand for packaged software, including systems infrastructure software (e.g. operating systems, security software), application software (e.g. Word, Excel, enterprise solution package) and application development/deployment software, was valued at USD 1.0 billion in 2006. Forecasts are for the market to reach USD 1.1 billion in 2007 and grow at an average annual rate of 8% for the next five years. Korea’s global leadership in wireless communications and broadband Internet access services has spawned tremendous demand for all types of software, especially for specialized and innovative technologies, providing opportunities for sales of advanced and highly specialized U.S. software solutions. U.S. suppliers' willingness to customize their software to meet specific user needs is a critical factor in end-user purchase decisions. Although U.S. software is considered superior, Korean end-users, more often than not, will avoid purchasing from U.S. suppliers if localization cannot be achieved.
In 2006, the total import market for packaged software, valued at USD 699 million, represented 3.5% of the total market demand, which, in general, consists of packaged software, computing-related services/software and digital contents. Although the statistics show the import market share to be relatively low, in reality, the substantial amount of localized or customized software and Systems Integration (SI) services provided by major U.S. subsidiaries that participate in large projects as strategic partners is counted in the total Korean software market share.
U.S.-sourced packaged software accounts for more than 80% of Korea’s software import market, and U.S. suppliers are expected to remain the principal suppliers of packaged software to Korea for the next several years. Technological advancements in Korea’s software sector is still behind that of the U.S. and Japan, a result of Korea’s relatively recent computerization and an acute shortage of highly qualified software engineers. Korea’s systems integration companies and software developers are actively trying to develop partnerships with global leaders in every segment of IT services and solutions to deliver total solutions to clients in a time-to-market manner and to target the domestic and global market at the same time. U.S. suppliers will continue to enjoy the competitive advantages of strong project management and marketing skills, compared to Korean firms and third-country suppliers.
The overall market demand for packaged software has been growing in relation to the development of Korea’s advanced IT infrastructure and related services in the e-commerce and telecom segments and will continue to grow at an average annual rate of 9% for the next three years. The fact that the Korean government has increased efforts to strengthen its IPR protection and enforcement through the Computer Program Protection Law (CPPL) has also contributed to the strong growth in demand for both Korean and imported packaged software.
Best Prospects/Services
· Systems Integrations/ IT Services in finance, telecom and public sectors
· Digital content development services / Internet Protocol TV
· Enterprise Solutions upgrade projects by both major Enterprise and small-and-medium firms
Opportunities
The market demand for IT services, digital content and security software are forecast to experience strong growth, driven by Korea’s mergers and acquisitions (M&As) among financial institutes, continued investment in wireline/wireless broadband convergence infrastructure as well as by growing demand for upcoming Internet Protocol TV.
Resources
Trade Shows
The 20th Solution & Contents Exhibition of Korea (Jun 20-23, 2007)
SecurityWorld Expo 2007 (Jun 27-29, 2007)
CardTech Korea & RFID World 2007 (Jul 11-13, 2007)
2007 IT EXPO BUSAN (Sep 12-15, 2007)
KES 2007 (Oct 9-13, 2007)
RFID/USN KOREA 2007 (Oct 31-Nov 2, 2007)
Key Contacts
Ministry of Commerce, Industry and Energy (MOCIE)
http://www.mocie.go.kr/eng/default.asp
Ministry of Information and Communication (MIC)
http://www.mic.go.kr/index.jsp
Radio Research Lab (RRL)
http://www.rrl.go.kr/eng/kindex.html
Korea Association of RFID/USN (KARUS)
Local Contact
(Mr.) Chris Ahn,
Senior Commercial Specialist
Commercial Service Korea
U.S. Embassy
32 Sejong-ro Jongro-gu
Seoul 110-710 Korea
Tel: 82-2-397-4186
Fax: 82-2-737-5357
E-mail: chris.ahn@mail.doc.gov
Website: www.buyusa.gov/korea