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  • Posts Tagged ‘iphone’

    China’s ‘Smart’ Smartphone Strategy: Being ‘Global’ and ‘Globalized’

    July 24th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    As I mentioned in a 2011 BBC News article, while Samsung and Apple have locked legal horns over a global and costly patent dispute, Samsung (and Apple) should now be pivoted towards the rise of a new generation of Chinese challengers.
     
    Chinese smartphone firms that are not entirely household names today in South Korea, the U.S., and Europe, inevitably will be in the future. This may not happen today or tomorrow, but rising Chinese challengers—Huawei, Lenovo, Coolpad, and ZTE—just to name a few, have the potential to be true dominant global players. This results in two main challenges facing both South Korean and Californian tech firms going forward, especially as it relates to the largest growing smartphone market, mainland China.
     
    The first challenge for such firms is that China’s “Big 4” smartphone players are already localised, while others are less so. As a result, China’s smartphone firms will instinctively and strategically know how to compete with foreign competitors like Samsung on their own home turf (where China has recently displaced the U.S. as the world’s largest smartphone market). This will be critical since Chinese consumers are known to be fickle fast movers, switching to new smartphone models about every six months (compared to every two years in the U.S. market). Thus, such Chinese firms will be best positioned to be where future demand will be, while foreign firms will still be sorting through market research from an outsider’s perspective. Already, one of the Chinese Big 4, Huawei, has introduced the world’s thinnest smartphone with the introduction of its Ascend P6. China’s Big 3 also will be more sensitive to the need for competitive low pricing in a country where the average person earns a mere fraction of those in South Korea and North America.
     
    Second, while the likes of huge firms have focused on being global, such firms may not necessarily be globalised. To be a sustainable dominant player in the current ever-evolving environment, a company needs to be both global and globalised. While South Korean and California-based tech titans are certainly global (in terms of overseas revenue, market share, and branches), they have yet to be fully globalized (in terms of strategic decisions made by a diversified group of senior leaders from around the world based on global standards).
     
    Firms like Lenovo have a senior executive board that boasts a global group of diversified talent who have true decision-making authority for the betterment of the firm. In the case of South Korea’s largest smartphone producers, most or all of the senior management are entirely domestic. Although having an entirely domestic board does not in itself signal not being globalised, it is nonetheless an important and revealing indicator for outside investors. And while having a homogenous board may lead to a higher chance of seamless execution, its downside may be the relative inability to see or do things differently. 
      
     
     
     
     

    Samsung Electronics – Silicon Valley “innovation centers” (6 Things to Know)

    February 12th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    (The questions below are partially based on a related interview today with a local Korean broadcaster)
     
    1) What is the motivation behind Samsung’s innovation centers?
     
    By creating innovation centers–Samsung Strategy and Innovation Center (SSIC), which includes a $100 million Samsung Catalyst Fund–Samsung’s objective is to secure the best talent in Silicon Valley. This may say signal increased confidence that it has the ways and means to go head-to-head with the likes of Apple right in Apple’s own backyard.
     
    2) Will Samsung earn a title, “an innovator,” by creating innovation centers? How soon would it happen?
     
    Samsung has publicly stated that its aspiration is not to be a game-changing “innovator.” Instead, it believes that its best strategy is to be a “fast follower.” This means, first, canvassing existing market demand and micro/mega-trends from region to region, and second, adapting technology to in essence “wrap around” such existing market demand. Steve Jobs, Apple’s former CEO, famously stated that “It’s not the customer’s job to know what they want.” Samsung has a polar opposite view–that it’s Samsung’s job to give the customer what they know they want. So far, both have been effective, with the momentum favoring Samsung than Apple in recent weeks, based on Apple’s falling share prices.
     
    3) Why is Samsung looking to create them outside Korea (in Silicon Valley) and not Korea?
     
    Samsung could be creating innovation centers outside of Korea for one of two reasons. First, it could be simply adding to its already existing creative capital as an offensive strategy. Or second, Samsung could be seeking creative talent that it views as lacking onshore in South Korea as a defensive strategy. What is sure is that South Korea’s human capital, and the education of such domestic human capital, does not promote or incentivize thinking outside the box (as of this writing, although efforts and trends may change going forward). As one example, Apple’s “think different” acclaimed marketing slogan in the U.S. cultural context is viewed as a potential good thing, but in South Korea, it is viewed generally as a net negative.
     
    4) Does this mean that Korea lacks creative class talent?
     
    This could certainly be the case. An added consideration is that the corporate culture of South Korea generally has a “do as you’re told” modus operandi. That is, to do your assignment, but not to question it. This is a bit ironic given the nature of the industry, high tech, which has generally been predicated on questioning the status quo and creating and thinking in an unorthodox and different way. One could say that such approach is a Western-Socratic mindset, not entirely fitting of South Korea. Only time and results will tell.
     
    5) Why does Samsung plan to increase investment in the U.S.?
     
    Samsung is essentially trying to maximize it’s ROI (return on investment) by creating a fund for future tech start-ups in the U.S. Silicon Valley has a population of approximately 3 million, whereby 17,000 new start-ups are created every year, which are then followed by 12,000 failures of such start-ups. Samsung may now be understanding that, much like many Silicon Valley VCs, it may take both a good eye of the next big thing, patience, mentoring, and a “wait for the mega home run” mindset by trying to find the next Facebook (although the next big thing most likely is a known unknown start-up that may appear at any given moment).
     
    6) What does this say about Samsung’s global strategy?
     
    Samsung is asserting itself on the global stage through its aggressive Silicon Valley strategy. But according to one source from the KITA, Samsung Electronics and other similarly situated firms have only a few years before it loses its competitive advantage to Chinese firms (which will, in essence, be the next wave of dominant high tech firms).

     

     

    Apple v. Samsung: $1.05b verdict, the beginning or the end?

    August 25th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    Apple has “won”…for now.

     

    Today, a federal US court ruled against Samsung, relating to patent infringement claims against certain Apple products (iPhones, iPads). Samsung has also raised claims against Apple.

     

    HIGHLIGHTS:

    – The jury’s conclusion was: $0 to Samsung, $1.05 bn to Apple.

     

    – We believe the ruling is not the “end” of the Apple-Samsung lawsuit war–instead it may be the “beginning.” True, the two have spent millions (or its won equivalent) in dozens of lawsuits spanning 4 continents. But this US lawsuit was important because (1) it is on Apple’s “home” territory (California); and (2) Samsung is highly dependent on US consumers buying Samsung products.

     

    – South Koreans will view the ruling as an unfair “home court” ruling (i.e., that this is a US court with US jury members in San Jose, CA, Apple’s backyard). Such sentiment may trigger a patriotic backlash against Apple products. In the past, Apple was identified less as an American company, but his may soon change. This could negatively effect the next iPhone (5) handset sales in South Korea. What Apple risks is an anti-Apple, anti-US double backlash effect in a country that has surprisingly been fond of Apple products (surprisingly because the rapid use of Apple products, specifically iPhones and iPads, happened right in Samsung’s own backyard, as explained in my ‘iPhoning of Korea’ WSJ op-ed below). Samsung may also request that certain Apple products be banned in South Korea in the future.

     

    – Importantly, the US ruling, with or without treble damages (where damages can be tripled), is not a “knock out” blow for Apple (given Samsung’s cash reserves), but it is a serious momentum shift towards it for Apple.

     

    – The ruling could just be the “beginning”? Namely, although the US court is a district court–the lowest federal court level–the lawsuit can in theory appeal at least 2 more times: (1) to the US appellate court; and then; (2) the US Supreme Court.

     

    – In practice, the higher up on the federal court hierarchy, the lower the chance that the appeal will be heard. So the chance of a successful appeal is not guaranteed (unlike in South Korea, in which appeals are often automatically granted). Even if an appeal is granted by the US appellate court, only issues of “law” not “fact” will be heard by a 3-judge panel and/or jury. In plain English, this means that the higher court will only hear an appeal if it believes that a possible “error in law” was applied by the judge. Basically, the appeal process is an uphill battle.

     

    – The case was heard by Judge Lucy Koh, one of the few Asian-American judges nominated to serve at the federal court level. She is a Harvard Law School graduate (a bit before my time there).

     

    – The momentum has now shifted significantly towards Apple

     

    CONCLUSION: before anyone begins to celebrate, this is not the end–Apple has won the battle, but it has yet to win the legal war against Samsung.

     

    * Check out my earlier WSJ op-ed piece (below), which explains how Apple’s iPhones surprisingly became so popular in Samsung’s own backyard of South Korea.

     

    Disclaimer: the author does not own any Apple or Samsung shares

    ———–

     

    The iPhoning of Korea – How Steve Jobs pried open a sheltered market and changed the way a country uses its mobile phones.

     

    Korean tech junkies are cheering this week’s move by the government to allow the import of the iPad, Apple’s new tablet device. Its introduction had been stalled by a government agency that claimed it needed to “certify” the tablet’s wireless networking feature. Popular pressure forced Seoul to reverse course. But while fans go aflutter over the possibilities of this new kind of computing, the transformation being wrought by the last Next Big Thing, the iPhone, is hardly finished either. It’s not simply that programmers and users continue experimenting with the iPhone’s technological capabilities. The iPhone also is shaking up …
    [The rest of the article can be found on wsj.com for subscribers]