50 Visits to Silicon Valley Since the 1970s
All-In on Technology Emphasizing No.1, Premium, and Talent
Rising as Apple Competitor from Anycall Legend
[Asia Economy Reporter Han Jinju] "With just three or four Bill Gateses, national income can reach $30,000."
This was a remark left by Samsung Chairman Lee Kun-hee after meeting Bill Gates, former Microsoft (MS) chairman, in December 1994. Jin Dae-je, then an executive in Samsung Electronics' semiconductor division and now CEO of Skylake, wrote in his book that their conversation lasted about two hours, during which "Chairman Gates explained that electronic wallets would eliminate the need to carry cash and that credit cards would be integrated." The dialogue between these two figures who left a great legacy in the ICT industry has become a 'reality.'
Growth through Passion for 'Technology' and Talent Management
The inauguration ceremony of Lee Kun-hee as Chairman of Samsung in 1987 (Photo by Samsung Electronics)
Chairman Lee had a strong interest in innovative technology, visiting Silicon Valley in the United States about 50 times since the 1970s. These experiences accumulated and led to talent management and technology investment for future growth engines. Right after Google's announcement of acquiring Motorola in 2011, he issued a special order to "relentlessly learn software technology and secure it at all costs." In 2012, Samsung Electronics established MSC America, a base for content, services, and research in Silicon Valley, home to Google and Apple.
He valued 'talent management' more than anyone else. Chairman Lee emphasized, "To secure technology, it is not enough to just recruit top-tier talent; you must create an environment where they can work." Representative figures include Jin Dae-je, CEO of Skylake, and Hwang Chang-gyu, former KT chairman. Jin is known to have researched master plans for what to do in the future after 10 years at Samsung. Former Chairman Hwang brought a win-win result for both Apple and Samsung by persuading Apple to adopt flash memory in its MP3 player, the iPod.
The Turning Point Made by the Anycall Burning Ceremony
In 1995, Samsung Electronics employees at the Samsung Gumi plant burning mass-produced products such as Anycall, wireless phones, and facsimiles.
Chairman Lee led the mobile phone and smartphone markets while adhering to a 'premium strategy.' The goal for all products and services was to be 'number one.' The 'Anycall burning ceremony' is regarded as a turning point that created the Anycall myth. Chairman Lee predicted, "An era will come when each person owns one wireless device," identifying mobile phones as the next growth engine.
Although the first mobile phone was launched in 1994, the focus on quantitative growth rather than quality caused the defect rate to soar to 11.8%. Chairman Lee was furious. In March 1995, Samsung destroyed and burned 150,000 defective mobile phones, cordless phones, and fax machines at the Gumi plant. After the burning ceremony, the defect rate dropped to the 2% range. Anycall's domestic mobile phone market share jumped from 30% to 50%. Although Motorola dominated the global mobile phone market, it was the only company to lose first place domestically.
The first ten million seller mobile phone called the Lee Kun-hee phone, 'Anycall SGH-T100'
From the mid-1990s, Chairman Lee introduced a 'three-line system' for mobile phone development. The first line focused on commercialization, the second line prepared for one year ahead, and the third line prepared for two to three years ahead, allowing the company to respond to market changes. The launch of the iPhone in 2007 was a major crisis but became a turning point for a rebound by leveraging this system.
"Let's Keep Moving Forward" The Birth of Galaxy S
Samsung Electronics released the 'Omnia' series based on the Windows OS in 2008 and 2009 but suffered a crushing defeat in the early smartphone market. After returning to management in 2010, Chairman Lee emphasized a sense of crisis, saying, "Most of the businesses and products representing Samsung will disappear within 10 years. There is no time to hesitate. Let's keep moving forward." The Galaxy S, launched in 2010, was developed by mobilizing all development personnel within six months. Chairman Lee took such an interest that he instructed to advance the launch schedule, earning it the nickname 'Lee Kun-hee phone.'
Shin Jong-kyun, former vice chairman and head of the wireless business division at the time, said, "It was possible because we had infrastructure built since the 2000s to catch up with advanced companies." Although Samsung was late in responding to smartphones, Chairman Lee is known to have encouraged wireless business division employees by saying, "Don't be afraid. We can do it too."
The Galaxy S became Samsung's first ten-million-unit smartphone by achieving global sales of 10 million units in 2011. Two years after the Galaxy S series was launched, in 2012, Samsung achieved sales of 400 million units by successfully launching the Galaxy S3 and Note 2. Samsung Electronics overtook Apple to become the market share leader. IT media Mashable evaluated, "Samsung no longer imitates Apple. It is the only competitor to challenge Apple."
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