In the world of the wired, South
Koreans rule: millions got hooked on social networking years
before Facebook; their mobile phones went broadband first; and
Internet connections are faster than anyplace on the planet.
Now they’re going pedal to the metal on the next hi-tech
craze: “black boxes” for cars, devices that automatically
record video and audio as well as time, location and speed.
What began five years back as a way to protect local taxi
drivers from passengers who run off without paying has caught on
with other drivers — 2.2 million black boxes are already in
use, more than the number of autos sold in Korea each year.
Broadcaster SBS has enough clips from viewers that it aired more
than 100 morning show segments on car crashes.
Thinkware System Corp. (084730) is the frontrunner among 200-plus
companies that offer about 600 types of black boxes in a market
the government estimates will grow annually by 500,000 units, or
150 billion won ($142 million). While Koreans are not alone in
using black boxes, their popularity in the home of Galaxy phone-maker Samsung Electronics Co. provides a clue to what may be the
next big thing in automotive gadgetry.
“South Korea is globally the biggest and most developed
black box market,” said Sul Jae Hoon, senior research fellow at
the government-run Korea Transport Institute. “With time, other
markets will be able to understand the benefits of having a
black box and adopt the devices like Korean consumers did.”
More Affordable
Black boxes in Korea have come down in price in recent
years and now typically range from about 100,000 won to 200,000
won each. They continuously record video and audio, even when
the car is parked, though they’ll only save the 30 seconds
before and after any incident that triggers the motion sensors -
- long enough to catch a hit-and-run.
While they also record data — time, vehicle location and
speed — these devices focus on recording video and audio,
unlike the event data recorders in the U.S. that have sparked
debates over privacy. Like airplane black boxes, EDRs track
everything from whether the brake was activated before a crash
to throttle function and determining when air bags were
deployed, though they usually don’t record conversations.
So why is road voyeurism so popular in Korea? Endorsement
from insurers and the government helped, as did affordability.
Privacy concerns haven’t been an obstacle because the devices
are installed by car owners, cementing the perception that data
they gather won’t be controlled by anyone else.
And let’s not forget the national obsession with gadgets –
the United Nations’ International Telecommunication Union has an
index of how geeky a country is and Korea ranks first worldwide.
Insurance Benefit
Shin Kyung Seung, 39, credits the black box on his Hyundai
Motor (005380) Co. sedan with proving his innocence in the eyes of his
insurers after eight-vehicle pileup on Sept. 8. The recorder
showed how Shin had kept to the appropriate speed and distance,
turned on his emergency lights, slowed down and then halted
before congestion up ahead. He then got rear-ended, spraining
his neck and waist.
Although it took a couple of weeks for Shin to recover from
his injuries, the incident was a lesson in how to avoid higher
insurance premiums. Shin, who runs a Facebook page that compiles
video clips from black boxes, uploaded the video on Google
Inc.’s YouTube.
“I hope to be able to play a small role in increasing
public awareness of traffic accidents through the black box
video sharing page,” Shin said. “Accidents can happen
anywhere.”
Motorists aren’t alone in benefiting from the recorders as
they help lower costs for insurers including Samsung Fire
Marine Insurance Co. (000810), prompting them to offer discounted rates
of as much as 5 percent to black box owners.
Discount, Coupon
“Black boxes help spot insurance fraud cases and simplify
the evaluation process of an accident, which helps minimize
costs,” said Shin Chung Kwan, an automotive analyst at KB
Investment Securities Co. “Insurance companies are very
enthusiastic about this. I recently changed my car insurance and
the insurer not only offered a discount on the package, they
even gave me a coupon for a black box.”
Then there’s the government, which in 2008 began
subsidizing the devices for Incheon city taxis. Soon, other
cities followed and now all taxi operators equip their vehicles
with black boxes, according to the transport institute.
Lee Sang Min, a representative in the Democratic Party,
says that’s not enough. He’s leading a group of 10 lawmakers
proposing revisions to the Traffic Safety Act to make black
boxes mandatory in all new cars sold in the country.
‘Black Box Club’
Lee may not need to. The “Black Box Club” Internet forum
on naver.com, Korea’s biggest search engine, is so popular that
it has more than 235,000 members. Black boxes were the fourth
hottest item of 2012, according to a survey report by Samsung
Economic Research Institute.
Hyundai Motor, the nation’s largest automaker, said it has
no plans yet to equip its cars with the devices, though the
company indirectly makes them through its Hyundai Mnsoft unit.
Other producers include Mando Corp. (060980) and Midong Electronics
Telecommunication Co., which is planning to capitalize on the
black box boom by going public on Nov. 13.
Thinkware estimates its 35 percent share leads the market
and has seen sales of the devices surge 17-fold to 47.2 billion
won in 2012 from 2.7 billion won in 2010. The Seoul-based
company has said it’s expecting further growth as it exports
black boxes to China, Singapore, and the Philippines.
In Western markets, black boxes may be a tougher sell. The
Electronic Privacy Information Center, a Washington-based
consumer group, has called for privacy safeguards to be set up
for EDRs after the National Highway Traffic Safety
Administration recommended automakers install them in all U.S.
light passenger vehicles from September 2014.
“The reason why the devices aren’t so popular in U.S. or
Europe is because both the parts makers and customers there are
concerned about privacy,” said Sul at the Korean transport
institute. “That wasn’t the case in Korea. From the very
beginning, the market didn’t consider black boxes as a threat to
privacy.”
To contact the reporter on this story:
Rose Kim in Seoul at
rkim76@bloomberg.net
To contact the editor responsible for this story:
Young-Sam Cho at
ycho2@bloomberg.net
Road Voyeurism Fueling Surge in Black Box Sales in Korea: Cars
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