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Imitation is the sincerest form of flattery, and Samsung is paying a compliment to arch-rival Nokia, aiming to emulate its shift into software and web services. The Korean giant, now number one in the US market, needs to build its defences against the downturn, but also the likely opening up of its home territory, where the government has finally dropped a requirement for handsets to support the homegrown content platform WIPI.

As Nokia girds its loins for the recession by stepping up its web services activities, to drive device growth and market presence in new markets, Samsung's senior VP of strategic planning, Young Cho Chi, said he aimed to take the same approach. Speaking at a customer summit in Seoul this week, he said Samsung would follow its largest cellphone competitor in aggregating a wide variety of applications and services around its handsets to set them apart in the market. "Content and services are not generating much revenue for Nokia, but 3-5 years from now they could be creating $4-5bn," he said.

In June, Samsung reorganized its telecom division, creating a new mobile solutions center to aggregate mobile content. Also like Nokia, Samsung expects to sign mobile content deals with Hollywood studios and Internet giants in 2009.

Samsung also said it would expand the list of OSs, applications and services available for its handsets in a drive for market share in a pressurized economy, and would release its first Android model some time next year. Other elements of Samsung's new strategy include support for Mobile WiMAX devices as well as, in future, LTE, and to pack its handsets with advanced hardware capabilities - for instance, Samsung will soon ship phones with miniature projectors.

In its home market, it faces new challenges. Compatriot LG has pipped it to the post in demonstrating the first LTE terminal, though it is unlikely to release handsets for a couple of years - and Young Cho Chi believes LTE is 4-5 years behind WiMAX in terms of commercial readiness.

More immediately, it may see an increased level of outside competition. This is partly because SKT is building out HSPA, bringing Korea its first non-CDMA networks and opening doors for the GSM handset makers, like Nokia and Sony Ericsson. And now the government, as long expected, has lifted its requirement for all handsets sold in Korea to support WIPI (Wireless Internet Platform for Interoperability), from April 1 2009. WIPI was adopted earlier in the decade as a means to reduce royalty payments to western technology owners, notably Qualcomm (WIPI is an alternative to the Qualcomm Brew content platform as well as supporting general mobile internet functionality).

Nokia and Apple are likely to head the queue to enter the Korean market, although as in Japan, they may find it hard to work as closely with the cellcos as the local suppliers do, or to satisfy the highly advanced and specific mobile internet requirements of the consumer base. The iPhone has made limited impact in Japan for these reasons, while Nokia recently pulled out of the market. But Apple is already working with Korea Telecom on iPod and Touch models for the country, so it would be logical to extend these efforts to the iPhone; while Nokia has been in talks with leading cellco SKT all year in anticipation of the ruling on WIPI. Nokia has been forced to withdraw from Korea on two previous occasions, the last time in January 2003, soon after the WIPI rule was initiated.

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