The Sony Walkman of 1979 had created the mobile consumer product category; and Samsung, though not the inventor of the mobile phone, was able to exploit the coolness of the mobile phones, writes Tony Michell in ‘Samsung Electronics’ (www.wiley.com). What helped Samsung was its decision to transform itself into a consumer-oriented and digitally-convergent company, he observes. “Samsung’s coolness factor got a big boost when one of its futuristic phones was featured in the second and third instalments of the sci-fi series The Matrix.”
This, as Michell points out, was a striking vindication of the decision not to abandon the consumer-electronics business in 1997-98, of CEO Yun Jong-yong’s belief in the power of digital convergence, and of the CMO Eric Kim’s ability to coordinate a global marketing campaign that raised the status of Samsung to prestige levels.
Looking back, the author traces how, in the digital contest in the 1990s, the Koreans and the Europeans diverged from the standard technology path, while the American network companies stuck to their direction, reluctant to abandon their investment in analogue phones. “European phone companies such as Nokia, Ericsson, and Siemens supported GSM (Global System for Mobile Communications) standards which were built round a form of digitalisation known as TDMA (Time Division Multiple Access); while Korea, almost alone, took a different technology known as CDMA (Code Division Multiple Access). Japan produced its own system, a variant of TDMA.”
CDMA, a government-led technology choice, meant that Korean domestic phones would not work anywhere else in the world, and thus protected Korean companies in the short-term in their domestic market, but also could have isolated them as a single global network grew by the end of the twentieth century, the author explains. “Japanese phone makers had the same protection/ isolation situation. In the end, the fact that CDMA was closer to the 3G (Third Generation) technology allowed the Koreans to make superior GSM phones to capture a sizeable slice of the global market.”
It should be of historical interest to read about the tortuous start of the story, when between 1983 and 1986 Samsung engineers struggled to reverse-engineer Japanese car phones. The results were so disappointing that there were doubts about continuing the programme, the author narrates. “But it was not in Samsung’s DNA to give up, and Lee Ki-tae, the young head of wireless development, decided to risk buying 10 Motorola phones instead. After a long struggle, in 1988 a phone was launched which could be used in Korea…”
Engaging account of corporate challenges.