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    SmartWatch Wars: How the Apple Watch May be an Opportunity for Asia’s Tech Giants

    March 14th, 2015  by  Asia-Pacific Global Research Group - Jasper Kim

    Apple unveiled its much anticipated line of Apple watches recently with a price range of $349 to $17,000. I believe they also revealed a weakness in the company. This is a weakness that Asian companies would be less prone to, such as Samsung (South Korea) and Xiaomi (China). In full disclosure I’ve owned several iPhones, an iPad, and an iPod. I loved these products because they were innovative, fun, easy-to-use, well-built and stylish. In my opinion, the combination of those aspects were done better than anyone else out there. Even though the iPhone is relatively expensive, I still felt that I got a lot of value out of the product. The iPhone eliminated the need for a separate camera, GPS unit, music player, desk calendar, etc.
    As word came out about the watch last year (2014), I felt that it had potential. I was leaning towards buying the least expensive version, realizing that there is probably little initial additional functionality over the iPhone other than the health functions. At this point, it seemed like more of a toy than a need to have, but I was willing to give it a try and open to further possibilities, as I suspect others may also have shared this same consumer sentiment.
    Hearing that the most expensive version of the Apple Watch would start at $10,000–and rise to $17,000–I thought the article I was reading had a typo. Now that this pricing is confirmed, it seems exorbinant on several levels.
    • This signaled that Apple is now willing to move away from products that provide true value. All of the value in a smart watch itself can be obtained at the base price of $349. Beyond that you are paying for jewelry. At a price level above $10,000 you have a vast array of world renowned watches to choose from.
    • What rational consumer would be willing to buy a $10,000+ Apple Watch over a Rolex? A Rolex is truly expensive, but one could argue that it’s not really that expensive at all because it will last for decades. The Apple Watch on the other hand will be the fastest depreciating watch of its price range as the technology advances will quickly make it obsolete.
    • If consumers buy the $10,000 watch, it’s akin to burning money for attention. The fact that someone would rather buy the $10,000 Apple Watch than use the extra money for a wise investment or charitable donation speaks volumes, in my view, of such consumer’s character.
    • Do I want to be associated with the “conspicuous consumption” individual who buys the $10,000+ Apple Watch?
    It almost seems to me that the $10,000+ Apple Watch is a cry for recognition amongst the Apple design team. After Steve Jobs died, there was a fear that Apple might not be able to innovate. Jony Ive thereafter became more prominent and powerful within the company. Rumor has it that Ive was the one who pushed for the $10,000+ watch. The $10,000+ watch is where the design shines and the technology takes a backseat. After all, the smart watch is the same across all models, so you’re just paying for the extra materials and design of the band at $10,000+. This, then, makes Apple not only a technology company but also a fashion company.
    Jony Ive is unquestionably a great designer, but this $10,000+ watch is an unnecessary distraction for the company. What made Apple work before was the teamwork: great vision, great technology, great execution, and great design. We can’t all be great at everything, that’s why we need a pool of diverse talents to make a company great. It appears to me that those at Apple with a talent for business sense and strategy were overridden by those at Apple that want to now be part fashion company. This, I believe, has the potential to create a rift within Apple’s employee and customer base.
    A better strategy for Apple would have been to go down the pyramid instead of up the pyramid. The top of the pyramid contains the wealthiest consumers and the bottom of the pyramid the poorest. When the iPhone C came out, some were expecting this would be Apple’s offering to the developing world, but it wasn’t. Most of the consumers in the world are in the bottom section of the pyramid. To go there is more difficult than to go up the pyramid, but the potential rewards are greater. This is a hole in Apple’s offerings that is recognized and being filled by other players in technology–including Samsung and Xiaomi–in the smart phone space, as well as even Google and Facebook.
    Corporations have the mandate to maximize shareholder value, and at first glance it could appear that extravagantly priced products may add value. However, if you deviate from what your stakeholders (in this case employees and customers) expect from you, those stakeholders may go elsewhere, thereby reducing shareholder value. The $10,000+ Apple Watch isn’t worth that risk. The weakness that the $10,000+ watch exposed is that there must have been a struggle within Apple as to whether or not to enter the luxury goods market. It’s not inconceivable, based on personal speculation, that Jony Ive may even have threatened to leave if not allowed to pursue his personal vision. This has the potential to fracture the company. Asian companies such as Samsung and Xiaomi are less subject to this issue because of Asia’s relatively consensus-based corporate culture. Asian companies are thus more likely to work cohesively as a corporate unit and follow the lead of senior management. This represents a rare yet tangible opportunity for many of Asia’s tech giants.
    Brian Sullivan is an Assistant Professor of Finance at Hallym University in South Korea where he teaches courses on finance and business. He has an MBA in Finance from The University of Chicago Booth School of Business and a BA in Economics from The University of California at Berkeley.

    If interested in how Asia-Pacific Global Research Group’s consultancy and training expertise can help your organization, CONTACT US HERE.
    The views expressed in this blog are not endorsed, directly or indirectly, by the Asia-Pacific Global Research Group

    Bitcoins, Bubbles and Bullishness: 5 Reasons Why Bitcoin Will Bust

    December 7th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Top 5 Reasons Why Bitcoin is Doomed
    Bitcoin is billed as a virtual currency that acts as electronic cash. Its value has soared from below $1 in 2011 to over $1,200 as of today. What is its intrinsic value, though? It is probably really worth less than $1 and this dramatic price rise is nothing less than a speculative bubble that will burst in due course. Although Bitcoin may be doomed for reasons I will outline below, the idea of a virtual currency is appealing. Ideally, a virtual currency would be as widely accepted as cash. You would be able to pay with it electronically at the store with your cell phone instead of carrying cash. Merchants would like it because the transactions fees would be much less than credit cards and debit cards. You could transfer the currency to anyone around the world without the high wire fees at banks. Although virtual currencies hold promise for the future, Bitcoin’s design will not allow it to be successful.
    Here are five reasons why Bitcoin is not the virtual currency of the future:
    1. Bitcoin is Not a True Medium of Exchange
    Money has to have certain properties to be called money. Money needs to act as a medium of exchange. If you take Won currency into eMart in South Korea you can exchange it for anything at the store. Likewise, you can do so with Won currency anywhere in South Korea. The Won is a true medium of exchange in South Korea. Can you use your Bitcoin at eMart? No. Can you use it at other stores in South Korea? Maybe a handful. There are only a handful of places in the world that accept Bitcoin. There are so few, in fact, that when someone does announce that they are accepting Bitcoin, it makes the news. Cyprus University became the first known university to accept Bitcoin. I never heard of this university before reading that article. Bitcoin has to be widely accepted to meet the medium of exchange criteria. The demand for Bitcoin that is driving its price above $1,200 is not due to its desirability as a medium of exchange. When looking at Bitcoin’s value as a medium of exchange it is certainly worth less than $1 because the US Dollar is enormously more successful as a medium of exchange. Although Bitcoin is terrible as a medium of exchange, it is fantastic as a marketing tool. It seems that all you have to do is announce that your company or institution is accepting Bitcoin and you make international headlines. Richard Branson is no stranger to clever marketing and recognized Bicoin’s value as a marketing tool. He recently announced that his Virgin Galactic is now accepting Bitcoin to buy tickets into space.
    2. Bitcoin is Not a Good Numeraire
    Another property of money is that it is a numeraire. You can easily count your money to measure your wealth and compare it to others. Forbes publishes its annual list of the World’s Richest People. Because money is countable, you can measure how much you have or measure who has the most. Sure, you can also count how many Bitcoin you have, but it is not as reliable as counting in other currencies that are much more widely used and much more stable in value. If you try to measure your wealth in Bitcoin it will fluctuate as wildly as the price of the currency itself, which we mentioned was less than $1 a few years ago and is now greater than $1,200. Bitcoin does not satisfy this property of money either. Again, in measuring Bitcoin’s value as a numeraire, it is certainly worth less than one US Dollar, which is widely used and relatively stable.
    3. Bitcoin is Not a Good Store of Value
    The third property of money is as a store of value. If you have more money than you need today, you can simply save it for the future. You can put it in the bank or under the mattress or wherever you’d like. You are storing money for later use, and because money has value, it’s a store of value. You can also store Bitcoin. Bitcoin are stored in a virtual wallet. The virtual wallet could be on your phone, your computer, or even a virtual bank. Part of the reason the Dollar and the Won are a good store of value is that they are relatively stable and widely accepted. You can put your Won in the bank for several years and feel fairly confident that you can take it out later and buy what you need with it. Dollar and Won deposits are also insured by the government. Bitcoin deposits are not insured and there have been reported cases of hackers breaking into computer systems and stealing Bitcoin. Additionally, the fact that Bitcoin’s price is unstable and the fact that you can only use it at a few places like getting your degree at the University of Cyprus and then shooting yourself into space, limits its appeal as a store of value. Again, as a store of value the Dollar is much better than Bitcoin, so Bitcoin’s value in this regard should be less than $1.
    4. Bitcoin is in a Speculative Bubble
    Supply and demand determine the price of financial assets. The supply of Bitcoin is created by a process called mining. If you mine for Bitcoin you can earn Bitcoin, just like mining for gold could get you gold. To mine for Bitcoin you lend the use of your computer to help process and authenticate Bitcoin transactions. Unlike Visa or Mastercard, for example, there is no central payment processing computer system that verifies and approves transactions. Bitcoin uses a dispersed network of volunteered computing power to do this. In return for this you can earn Bitcoin. However, it turns out that mining for Bitcoin gets harder and harder over time. It’s been estimated that if you use your personal computer to mine for Bitcoin that it could take several years to earn a Bitcoin. The electricity you consume in trying to mine for Bitcoin may actually cost you more than it’s worth. There is also an arbitrary supply cap of 21 million Bitcoin. This means that after the 21 millionth Bitcoin has been mined, there will be no further Bitcoin produced. Thus, the supply of Bitcoin is increasing at a decreasing rate.
    On the demand side we’ve already shown that the demand for Bitcoin has nothing to do with its value as a medium or exchange, a numeraire, or a store of value. In other words, the demand for Bitcoin is not the result of wanting to use it as money. The demand for Bitcoin is purely for speculative purposes. This is a classic bubble that will burst once enough people realize that Bitcoin is no more valuable than a Dollar bill.
    5. Bitcoin is Allowed to Float Against Other Currencies
    I believe that one of the design flaws of Bitcoin is that it was immediately allowed to float against other currencies. An economy can’t survive a wildly fluctuating currency. This is why central banks will intervene to stabilize their own currencies. An unstable currency is bad for business. It’s also very bad for Bitcoin. Imagine a store like Wal-Mart trying to accept Bitcoin. They would have to somehow constantly update their Bitcoin prices on thousands of products several times a day. The cost of doing so would greatly outweigh the benefits of accepting Bitcoin. If you want a virtual currency to be widely accepted, it needs to be stable. The best way to do that is to fix the value of the virtual currency to the value of the currency in the economy it’s operating in. In other words one unit of virtual currency should equal one Dollar. This makes it easy to implement for merchants, who would otherwise have to have two sets of prices on everything. Because there is no central authority that can intervene to stabilize the value of Bitcoin, Bitcoin will never be stable and therefore can never be widely accepted as a medium of exchange.
    Bitcoin is doomed to crash and burn. It is a speculative bubble. Its free floating nature leads to instability, which will prevent its widespread use. Its true value is less than the value of one US Dollar because the Dollar is so much better in terms of the functions that money must serve. Accepting Bitcoin, in the short-run, does appear to attract a lot of attention to your business and may therefore be an excellent marketing tool. It has also done a great job of getting news out about a virtual currency. All that needs to be done is to create a new virtual currency that addresses the pitfalls of Bitcoin.
    The 3 Things Needed for a Successful Virtual Currency:
    1. The Virtual Currency Should Have a Reliable Institution Backing It
    2. The Virtual Currency Should be Completely Stable
    3. The Virtual Currency Needs a Virtual Bank With Insured Deposits

    Part of the reason the US Dollar is such a reliable form of money is that it is backed by the US Government. The central bank of the US will intervene in currency markets to stabilize the Dollar if needed. You don’t necessarily need the backing of the US government to have a successful virtual currency. For example, Apple could launch a virtual currency called iMoney. You could buy iMoney with US Dollars. Apple would back iMoney such that the value of iMoney would always equal the value of 1 US Dollar. If someone offers you less than $1 for your iMoney, you could sell it back to Apple for $1. Therefore, iMoney would never drop below $1 in value. If someone wanted to buy iMoney they would never pay more than $1 for it because Apple stands ready to sell iMoney for $1. iMoney would therefore be stable in value and backed by an institution that is trusted. A stable virtual currency backed by a reputable institution will lead to greater adoption of that currency by merchants. Merchants would pay a fee for iMoney transactions similar to, but much smaller than, Visa or MasterCard transaction fees. Apple in turn would use some of this iMoney profit to purchase insurance on iMoney deposits. Your iMoney would then be protected against theft if it is stored in the iBank, just as your US Dollar deposits are insured when deposited at a bank. The iPhone 5S would be a perfect way to use your virtual currency. You go to the checkout counter at the store. The cash register connects to your iPhone via Bluetooth or some future technology. You place your finger on the fingerprint scanner and the virtual currency is transferred from your iPhone wallet to the store’s iBank account.
    Alternatively, Samsung could do the same with a sMoney virtual currency that is fixed in value to the Won. They would launch it in South Korea. South Korea, having some of the most tech savvy consumers in the world would be the perfect place to launch such a virtual currency.
    Brian Sullivan is an Assistant Professor of Finance at Hallym University in South Korea. He is a graduate of both The University of Chicago Booth School of Business and The University of California at Berkeley. His wife is from the Philippines.
    If you are interested in how Asia-Pacific Global Research Group can help your organization, CONTACT US HERE.

    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 Electronic’s future growth strategy: what to do when screens can’t get any bigger?

    June 21st, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    Jasper Kim of Asia-Pacific Global Research Group is featured in this BBC tech report today as 1 of 4 expert commentators on Samsung’s future growth strategy (below is a short excerpt of the full article found HERE):
    In 2011 (in an earlier BBC tech report), I warned the rise of China’s emerging electronics companies was a tangible threat to the world’s bestselling smartphone maker.
    As we have seen, emerging tech titans from the mainland, such as Huawei and ZTE, have since made gains. It should serve as a wake-up call to the South Korean firm.
    Samsung’s recent string of smartphone successes have largely, but not entirely, been linked to the relatively straightforward formula of offering consumers larger screen sizes with an American-based operating system – certainly evolutionary but not exactly revolutionary on Samsung’s part.
    But assuming that we are now at the limits of how big one-hand display screen sizes can get, the focus will shift more towards price points and brand familiarity than a “bigger is better” mentality.
    Samsung’s ultra-aggressive and expensive marketing strategy was a key factor in its brand awareness outside of South Korea.
    But to capture the billion-plus mainland Chinese market, homegrown firms, such as Huawei and ZTE won’t need to expend the same amount of marketing resources to gain brand familiarity and consumer trust.
    Chinese firms will also be naturally positioned to know exactly what its domestic consumer base wants before any other foreign tech firm, including the likes of Samsung and Apple.
    Samsung should not rest on its laurels. This week’s introduction of Huawei’s Ascend P6 – the world’s “slimmest” smartphone – is just the beginning of future innovative products to follow.
    If Samsung fails to pay heed, the rise of such Chinese tech firms could be tied to the decline of Samsung’s market share in China and beyond.




    Mobile phones in North Korea?: 1.5M users and growing (4 Factors)

    February 5th, 2013  by  Asia-Pacific Global Research Group - Jasper Kim

    (The questions below are taken from an interview with a local Korean broadcaster on 2/5/2013)

    1) Mobile phones are a reasonably new phenomenon in North Korea, with even King Jong-Un himself sporting a smartphone, how might increased usage shape the political landscape?
    The increasing use of mobile phones, including smartphones, in North Korea has the real potential to dramatically reconstitute the political landscape. An estimated 1.5 million people, according to one source, currently use mobile phones of some sort within the closed Stalinist state. The DPRK even has 3G capabilities–through a joint venture between Orascom (an Egyptian carrier) and Koryolink (a North Korean telecommunications entity)–which is actually comparable to the carrier services used by many South Koreans and Americans today. So this should be a wake-up all that the North is ready, willing, and certainly capable of becoming a wired and connected society–a dramatic shift from its recent past as one of the most closed-off and disconnected states in the international community.
    2) Texting has become extremely popular in Pyongyang, and has increasingly been used as a tool in organising protests/riots around the world (think Cronulla riots in Australia, Mozambique riots, London riots), could this new technology lead to an uprising from the people?
    Potentially, but nobody knows for sure. It’s not a certainty mainly because the DPRK has strategically disallowed the use of the internet, except for a few rare cases related to the military and one or two educational institutions. So in effect, the mobile phones used by North Koreans today allow for internal calls and texting, but not international/cross-border communications. This exclusion includes the use of social media, such as Twitter and Facebook. This is no accident since the DPRK leadership has likely carefully scrutinized what can and has happened when the general public is allowed to have such access to social media, in which existing government structures can potentially be toppled and replaced–the very outcome that North Korea is seeking to avoid at almost any cost.
    3) Kim Jong-Un has been seen with a HTC smartphone (distributed by the KCNA on January 27, 2013). Is this a political choice, a personal preference of design or does he fancy himself a bit of a hipster going against the mainstream?
    Kim Jong-Un is the current leader of one of the most provocative states in the world. So he doesn’t have the luxury to choose much of anything, let alone a smartphone with potential cutting edge technology, to be based on purely personal preferences. Almost every move he makes and every word he states can and most likely surely is scrutinized heavily to the highest level of minutiae both inside and outside the DPRK. The HTC smartphone Kim Jong-Un was seen recently with, placed directly next to him at a high level internal meeting involving military and foreign affairs officials, can be interpreted to signal to the outside world that the DPRK is not as technology handicapped as many people believe it to be. Add on to this the North’s successful missile launch last month and we have the makings of a country that may be seeking technology for further future provocative “predictably unpredictable” acts defined to include traditional (military and paramilitary) as well as non-traditional (cyberattacks) in scale and scope.
    4) Do you think mobile phones may be another way for the regime to have a heavy hand over its people by spreading mass propaganda?
    Certainly so. We believe that the DPRK has signaled an increasing interest and desire to shape the narrative in terms of how the world, including global media outlets, sees it. In the past, North Korea allowed for others to shape this narrative about its intents, capabilities, and desires. But now, maybe because Kim Jong-Un has grown up in Switzerland with the internet, Google, and probably Facebook, the North has become increasingly proactive about allowing foreigners, including foreign journalists, into its borders, as well as to release more information more quickly through its state news channel, the KCNA. So, with 1.5 million mobile phone users, it wouldn’t be surprising to see the DPRK leadership use it as another outlet upon which to shape the narrative about its alleged accomplishments (and maybe even failures, as seen in the April 2012 failed missile launch attempt).

    Education: The Rise of South Korea’s “corporate colleges” (Asia-Pacific Global Research Group – blog report)

    November 28th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    1. LG Electronics as well as Hyundai Department store, two of the most prominent Korean conglomerates, opened their so-called “corporate colleges” last month. And I’m sure this sounds pretty foreign to many of us… Could you tell us a little bit about what these are?

    Students attending these so-called “corporate colleges” typically spend half of their day studying regular subjects and the other half working or receiving specialized job training. Accepted students are promised to have a full-time job at the company when they graduate. Most if not all of the programs are highly subsidized, sometimes free of charge.
    As one example, Hyundai Department Store will offer up to 450 hours of classes a year focused on teaching knowledge and skills necessary for retail workers. Hyundai’s corporate college has already accepted 31 high school graduates and has promised to hire them on a full-time basis after they complete the two-year program, which starts next year. The corporate college also offers a graduate-school-level program specializing in marketing, setting a new precedent. LG Electronics has decided to run 14 programs for 1,500 trainees a year.
    2. Are these corporate college programs linked to private sector Korean corporates backed by the government? What’s the government’s response to these novel institutions of education?
    South Korea’s Ministry of Employment and Labor is very supportive and cooperative. . Labor Minister Lee Chae-pil has stated: “Schools like these will help recruiters focus more on the practical abilities of job applicants [rather than just looking at their educational background]… We encourage large companies to build a quality labor force through operating such educational facilities.” The same Ministry plans to cover at least 80 percent of the education fees. It has also given the companies the freedom to weight the content of their curricula in favor of their specific industry or niche. The government is preparing to open up to eight more corporate colleges this year. “We want to show job seekers who only have a high school education that they can still pursue higher education while working,” said Park Sang-yoon, an official at the Labor Ministry’s human resources department.
    3. Are there other examples of models resembling ‘corporate colleges’ in different countries that are trying to deal with similar problems of unemployment and underemployment? Or is this a unique case?
    Corporate colleges outside of South Korea are still the exception, rather than the norm. But examples still exist. For instance, Pearson, the parent company for the Financial Times newspaper will launch Pearson College beginning September 2013. Admitted students will be given internships and a mentor, which will most likely link with Pearson’s many subsidiaries. Students still must pay tuition, but they are granted a final degree, validated by the University of London.
    4. What are some potential practical problems that you foresee with an alternative education system like this?

    Corporate colleges do not award an official degree, so it is no guarantee of getting a job at companies outside the one sponsoring the school. The education will also be very industry and company specific. So the skill sets learned will probably not be very transferable to other companies in and outside the industry. Still, a subsidized education linked with internship and job prospects will be very appealing for many, but not all, parts of the population.
    5. Do you think the attention and governmental support that corporate colleges are receiving, in conjunction with the bad rap traditional universities are getting for low employment figures among graduates, etc, will pressure those standard universities to take on reforms? If so, what kind?

    For many South Korean universities, the perception will be that corporate colleges are not a threat, namely for the reasons stated earlier, particularly that no degree is conferred to students. However, many local universities are becoming more focused on practical training. But this can be a challenge since many faculty are theory-based, rather than practice-based. The challenge is to blend both together for the benefit of the student (and future member of the global working population).
    6. As an educator and as someone who writes and speaks about education, does this give you cause for concern — the corporatization of education? Education being, in a way, defined and subsidized by moneyed interests?
    It does not. Rather, it gives hope to those who may not normally be able to receive education beyond high school, especially for the economically disenfranchised. In our free market system, the more choices the better. If the system of corporate colleges don’t work, then it can be eliminated later on.

    Apple v. Samsung: Expert Opinions (Asia-Pacific Global – featured)

    August 29th, 2012  by  Asia-Pacific Global Research Group - Jasper Kim

    Jasper Kim of Asia-Pacific Global Research Group has been featured in the BBC in its piece today in its “Expert Opinion” section relating to the Apple-Samsung patent verdict:


    Apple-Samsung patent verdict: Expert opinions


    Future wars?

    Jasper Kim, the founder of theSeoul-based Asia-Pacific Global Research Group, says South Koreans may perceive the ruling as unfair because the trial took place in the US – and such sentiment could trigger a patriotic backlash against Apple products.

    I believe the ruling is not the end of the Apple-Samsung lawsuit war; instead it may be the beginning.

    In the past, Apple was identified less as an American company, and more as a technology giant – but that may soon change.

    What Apple risks is an anti-Apple, anti-US double backlash effect in a country that has surprisingly been fond of Apple products. I say surprisingly because the rapid rise in popularity of iPhones and iPads happened in Samsung’s own backyard.

    An anti-Apple sentiment could undo all of that and negatively affect sales of the next edition iPhone here.

    Samsung may also request that certain Apple products be banned in South Korea in the future.

    At the same time, the South Korean firm can in theory appeal at least two more times against the US ruling; to the US appellate court and then to the US Supreme Court.

    So while the judgment has shifted the momentum of the legal tussle between the two rivals significantly towards Apple, the celebrations may need to to wait for a while.

    Apple has won the battle, but it has yet to win the legal war against Samsung.



    apple v. samsung

    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.



    – 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 …
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