By Don Southerton, KoreaLegal.org Editor
This fascinating article showed up in Korea Times. It provides some additional dimensions to the Samsung–Apple relationship– and how Samsung sees the clash as part of its Destiny.
BERLIN – Samsung Electronics is in a transition game with Apple and regards the ongoing patent disputes with Apple as “destiny’’ before the next progress in corporate growth.
Samsung, South Korea-based tech giant, is aiming to become the world’s top-tier software firm by the end of 2013, at the earliest and its chief executive said it will heavily boost its spending on software.
“Samsung regards court battles with Apple as destiny. We are clashing with Apple in certain areas. Current situations will make us stronger,’’ said the company CEO Choi Gee-sung in a dinner meeting with Korean reporters, Friday.
“There had been heavy doubts about Samsung whether we can pass over Sony of Japan and even Nokia. But the results are telling everything,’’ said the top company executive.
Such remarks are very rare considering Samsung’s long tight-lipped policies about its key clients. Apple is Samsung’s biggest overseas client, followed by Hewlett-Packard (HP) and Sony.
Choi came to Berlin to participate in the IFA technology fair.
The most critical 19 litigation cases between Samsung and Apple will get rolling in U.S. district courts in California.
Preliminary rulings there could affect Samsung’s ability to sell products in the United States _ Samsung’s biggest market.
Another senior Samsung executive, who participated in the meeting, simply ruled out the possibility that Samsung will come to a licensing deal with Apple, dismissing earlier predictions that the two companies will ultimately enter a comprehensive licensing deal.
“Samsung has no reason to send a `goodwill gesture’ to Apple first and therefore it is highly unlikely that Samsung will come to a licensing deal with Apple,’’ said Hong Chang-wan, the head of the company’s home appliances division.
Samsung apparently has no interests about the acquisition of HP’s webOS patent portfolios as it won’t follow any “cyclical fashion trend’’ just to respond to market changes.
“One thing clear is that Samsung will never buy HP’s webOS patent portfolios and I think that’s not important. We have over 20,000 software experts and Samsung prepares beyond normal imaginations. We are open to strike small M&A deals, though,’’ said the chief executive.
Samsung in recent weeks has taken pains to show that it understands the need to focus more on software to increase its margins.
Samsung’s public relations office leaked word that Chairman Lee Kun-hee told top executives last month, “We must pay attention to the fact that power is moving away from hardware companies such as Samsung to software companies.’’
And the chief executive Choi said, it will invest heavily to follow up with the trend, though the chief executive declined to elaborate further.
“Samsung is not an unorganized firm. In long-term evolution (LTE) service, which regarded as the next-generation telecom tech, Samsung will become the leader just within the next few years,’’ Choi told reporters.
Bullish sales target
Samsung plans to reap $150 billion in total revenue by the end of this year and the CEO Choi said the tech giant will continue a “double-digit growth pattern, annually.’’
Also, the South Korean firm is aiming to create $70 billion in total revenues only in Europe by the end of 2015 as it is more than positive for further external growths in Europe.
“Before coming to Berlin for the IFA exhibition, I visited Copenhagen of Denmark and Zurich in Switzerland, where we’ve been struggling. But even these markets, calls are high for Samsung’s premium-branded products,’’ Choi said.
“By the end of next year, the number of top-ranking items will be increased to 12 and we are aiming to get $23.7 billion in sales just from finished-goods business,’’ according to Choi.
Additionally, its home appliances chief Hong said Samsung is considering the possibility to build a new home appliances product line in Brazil and added Samsung will be safe in any litigation troubles with the market leader Electrolux of Sweden and Whirlpool of the United States.
Meanwhile, Samsung also plans to become the world’s third-biggest notebook manufacturer by the end of 2015.
“We are internally targeting to sell 40 million notebooks by 2015 and Samsung is also eyeing for printer sector dominated by Japanese companies,’’ said Nam Seoung-woo, who handles Samsung’s printer and notebook business.
Korea Legal.org 2011 Trends and Expectations—An Executive-level Commentary
Monday, January 3rd, 2011By Don Southerton, Editor Korea Legal.org
Annually in an executive-level commentary, I share thoughts for the upcoming year. Looking back at 2010, North Korean saber rattling took on new meaning with several overt military confrontations against South Korea. Meanwhile, South Korea’s economy saw little sign of a double dip recession, which had worried some experts going into 2010, instead we saw continued growth in Korea’s global brands. This was further strengthened by the G-20 Summit that showcased, among others, Korean technology leaders Samsung, Hyundai-Kia Motors, and LG.
Related to U.S. and South Korea relations and following an amended agreement for the Korea-U.S. Free Trade Agreement, we should soon see the treaty ratified by Congress. Advocates see the FTA boosting annual commerce between the two nations into the billions of Dollars.
Looking forward to 2011, North Korea will continue to be a concern. Issues include the Kim regime’s succession plans, threats of more border clashes, and an unchecked nuclear arms program. Hoping to address these concerns, we’ll see strong outside diplomatic and political pressure for renewed 6 Way Talks, and to quell future border confrontations. I’ll continue to monitor and share news as it unfolds. Even in a worst-case scenario, Korean global business and local economy would bounce back and move forward, especially since much manufacturing is now done overseas.
Next, building on the momentum of the past 2 years, expect Korea’s export-driven firms to push their organizations to carve out even greater market shares. Look for bold announcements and sales targets such as #1 in global sales or production vs. the older “Top 10” or “Top 5” quest. In this effort, expect top Korean firms to expand their organization through M&A. For some, this breaks from a tradition of building and growing from within vs. acquisitions.
Additionally, as I noted last year, expect more foreign firms to aggressively target South Korea as a top emerging market. In other words, with Korea performing well many global firms and brands once focused on North American or European business partnerships will now seek out Korean opportunities. This will unfold with global businesses looking to launch new product lines (and brands) in Korea, as well as leading international firms offering their services to Korea’s top companies.
For foreign businesses entering the Korean market or partnering with Korean firms, I suggest they take efforts to understand not only the culture, but also business norms and expectations. For example, your key management needs access to coaching and someone to answer their questions on topics ranging from strategy to the impact of routine management changes within their Korean partner’s organization. It’s a small upfront investment and less costly than the consequences, which can include lawsuits, local and expat employee turnover, and months of missed goals and low productivity–not to mention tensions between you and the client over expectations.
Finally, expect further growth in Green technology (wind power, solar, and eCars) and government-led initiatives like “Work Smart.” With regard to Green, most of Korea’s major Groups have boldly entered the renewable and sustainable market and plan to expand sales globally. This includes state of the art manufacturing facilities for wind turbines, solar cells, next generation batteries, and electric power trains.
In the shift to these new technologies, forward-thinking firms are moving towards a creativity-centered organizational and workplace culture. On one level, “Work smart” was introduced in Korea to address the quality of life issues raised by its traditional long working hours. According to a Samsung Economic Research Institute report, “Work smart” will spread in 2011, and has a goal to increase productivity and creativity. Work smart includes not only eliminating unnecessary busy work, but grants autonomy in choosing working hours and gives teams the “work from home” option.
To conclude, understanding the dynamics of Korea’s economy, markets, and major business groups is vital. It is critical to take into consideration Korea’s past and current trends. Culture, global influences, cyber-communication, and a 24-hour workday add to this complexity. Bridging Culture Worldwide is dedicated to providing much needed research, analysis, and critical thinking to provide you with answers and insights 24-7-365.
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