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.