Google's self-driving car to be equipped with LG battery

From Yonhap:

LG Electronics Inc. said Thursday it will supply battery packs to the self-driving cars to be launched by U.S. Google Inc. a move that wil certainly help South Korea's No. 2 tech giant tap deeper into the automobile industry.
"We have been conducting various projects with Google as a strategic partner. Our automotive technology will now be applied to Google's self-driving cars," an LG official said.
A battery pack is a set of any number of individual battery cells.
Google said it will also partner with U.S. automaker General Motors Co., Japan's Toyota Motor Corp., Germany's Volkswagen AG and Daimler AG, and join forces with chipmaker Nvidia Corp. and German automotive technology giant Bosch as well.
Earlier this month, LG said its chief has discussed possible business tie-ups with the head of Mercedes-Benz. The company launched the Vehicle Components Division by regrouping its business sectors in 2013 in line with its efforts to tap new sources of profits.

http://english.yonhapnews.co.kr/business/2015/01/15/87/0501000000AEN20150115009900320F.html

Rethinking Everything with LG at Maker Faire New York

From Makezine:

One particular exhibit that really caught my eye this year was LG. Nestled between the many large white “event tents” that house most exhibitors was the LG Rethink Everything booth. Their entire area was built and decorated with repurposed pallets — from the structure itself, to the tables and all of the plant holders. Not only was it visually refreshing, I picked up a couple of ideas that I may have to implement the next time I see a stack of pallets going to waste.

Once you stepped inside, you could clearly see that LG gets the maker mentality. Sure, they want to show off their products, but they didn’t just haul in their appliances and talk about how great they are. They literally ripped parts from them and let makers build things with these parts. You could create characters to race on washing machine motors, and make little decorative light and sound boards with LG displays. People were learning to solder and having fun. To top it all off, they had a cool little printer so you could take a picture of your racing creation and take a print with you, like an old Polaroid.

Great job LG, You rocked this year. We can’t wait to see you next year, and we know we’re not the only ones.

racing hand made monsters on a repurposed LG motor

 

http://makezine.com/2014/09/29/rethinking-everything-with-lg-at-maker-faire-new-york/

Samsung, LG In Row Over Eye-Tracking Technology

From Yonhap:

South Korean manufacturers Samsung Electronics Co. and LG Electronics Inc. are in a patent row over technology that enables users to control their smartphones with their eyes, upping the ante between them as they both plan to release flagship devices next month, market watchers said Tuesday.

Samsung Electronics and LG Electronics both incorporated eye-tracking technology in their latest flagship smartphones -- the Galaxy S4 and the Optimus G Pro -- which are set for release in April.

The feature, which Samsung Electronics calls "smart pause" and LG Electronics calls "smart video," pauses a video when a user looks away then resumes it when the user turns back to the device.

Both companies have been promoting the eye-tracking technology as one of the key user experience features of their latest flagship smartphones.

While the eye recognition technology was touted as one of the key features of the Galaxy S4 and was announced through product teasers, LG Electronics claims it already applied for the technology patent in August 2009.

http://english.yonhapnews.co.kr/news/2013/03/19/28/0200000000AEN20130319005600320F.HTML

LG's 55-inch 3D Google TV Eyes-On

From Engadget:

LG made tentative inroads into the Google TV space last year with only two available sets, but here at CES 2013, the company's announced plans to expand the line to seven additional models. The sets, which range in size from 42 to 60 inches, feature LG's Cinema Screen display at full 1080p resolution with 240Hz refresh rate and are also 3D capable. For input options, consumers will have ports for HDMI (4x) and USB 2.0 (2x) along with wired ethernet (WiFi is also supported). The company's custom Magic Remote has also seen some improvements as the buttons for navigation have all been moved further up, allowing users a more comfortable one-thumb experience. And from the time we spent holding it, it seems that slight change does help enhance overall in-hand comfort. As for new additions to the remote's layout, LG's added in dedicated buttons for voice control and its Prime Time Quick Smart Guide which brings up an overlay of currently airing programs and remaining air time. There's no pricing available at this time, but we do know these sets will hit the market in Q1 of this year.

http://www.engadget.com/2013/01/08/lgs-55-inch-3d-google-tv-eyes-on/

Karl Denninger: It Is Time To Boycott Apple

This post contends how Apple has copied a design by LG back in 2001.  Apple has been really good at marketing overall.

From the Market-Ticker:

Apple likes to claim it is an "innovator" and thus files patents on various design elements by the boatload.  The problem with this claim and then the legal cudgel that it buys with these claims is that they always have been demonstrably false and now this has ratcheted up into attempts to bar obvious design features that Apple did not invent from being sold by anyone but Apple.

What has Apple actually "innovated" in? 

One thing: cult consumer behavior.  There it has indeed innovated.

The company stole Xerox PARC's ideas (specifically the Star workstation) when it came to the mouse and graphical user interface.  It did not invent any of those features -- not windows, not icons, not the mouse, none of it.  None.  Utterly none.

This was well-documented by the early 1990s.  But today, nobody cares.

Today, however, Apple claims it owns a rectangular tablet design with rounded corners and rectangles with rounded corners on the screen.  It claims to have invented this.  It claims that this was innovative and original work.  It even claims novelty and trade dress rights for the name "iPAD."

Apple is lying as the below image demonstrates conclusively.

I present to you the LG Tablet computer, called "The Digital, iPAD", with a rectangular form factor, rounded corners and a graphical user interface complete with windows, designed as a media-consumption device.  Oh, I almost forgot -- it ran Linux.

I said "ran", not "runs". See, this isn't a new item, or something you will be able to buy in the United State for Christmas.  Nor is it a copy of Apple's technology.  The facts are exactly the other way around.
When was this item invented and first made known to the public?

2001 at CeBIT. 

That's clear prior art and thus, other than a possible claim by LG as to those unique design elements, all of those so-called "unique design elements" including the name are in the public domain.

The development of the iPhone began in 2004, and the iPAD was first introduced in 2010, nine years later.

Apple has continued its abusive practices when it comes to the US and international legal system and yet the fanboi segment has shown a continued willingness to buy their products.  This is self-destructive behavior, as those who do so are not only overpaying based on the limited monopoly practices granted by patents that should have never been issued due to that prior art, but in addition they are providing Apple with the money to further abuse the legal process in the United States as well with claims of "novelty" when in point of fact there is no novelty that exists.

Apple, having duped a jury in the United States with slick lawyerly arguments now seeks to ban anything with rounded corners. 

In response we should ban Apple and tell them that they're welcome to play their games with offshoring and abuse of the patent system somewhere else -- but not here in the United States.

http://market-ticker.org/akcs-www?post=210968

LG Display Chosen To Develop 60-inch flexible OLED By Korean Government

As shown in the case of the mobile phone industry, the Korean government’s direct intervention in picking winners and losers in specific product/industry development tends to serve the interests of a chosen few, not the general public in the long run.  Instead, they should use more indirect measures such as tax cuts and implement institutional arrangements for businesses to pursue technological innovation and capital investments on a level playing field.  The state-backed, chaebol-centered innovation undertaking in a mercantilistic twist Korea has engaged in has fundamental flaws over the long haul.

From Korea Herald:

LG Display has been chosen by the government to lead a project to develop transparent and flexible organic light-emitting diode displays.

Korea’s second-largest display-panel maker said that it will develop proprietary technology for ultra high-definition, 60-inch flexible OLED displays by 2017 as part of the government’s “Future Flagship Program” to promote next-generation technologies.

The Ministry of Knowledge Economy, which is spearheading this program, is aiming to achieve exports worth $56 billion and create 840,000 jobs through the research and development of transparent and flexible displays, LG Display said.

OLED has been chosen as one of the key technologies the government seeks to further develop by strengthening the industry’s R&D capability.

http://khnews.kheraldm.com/kh/view.php?ud=20120711001123&md=20120711201332_8

한국 휴대폰 판매 세계시장 석권, 그러나 해외 생산 대부분

한국 휴대폰 제조업체들이 세계시장에서 선전할 수 있는 데에는 한국정부의 backing이 있었기 때문에 가능했다. 그러나 결국 이러한 정책들이 궁극적으로 누구의 이익을 위한 것이었는가? 다시 한번 강조하자면 제조업 일자리의 감소는 중산층의 약화와 전반적인 사회 기반의 쇠퇴와 연결되어있다. 미국과 일본의 예가 이를 여실히 보여주고 있다.

한겨례로부터:

삼성전자는 지난해 9740만대가 넘는 스마트폰을 팔았다. 애플을 따돌린 세계 1등이었다. 스마트폰 덕택에 삼성전자는 연간 매출 165조원, 영업이익 16조2500억원 달성이란 금자탑을 쌓아올릴 수 있었다. 하지만 그 ‘주연’은 지금의 삼성 휴대폰을 있게 한 구미공장이 아니었다. 중국과 베트남 등 해외에 있는 공장들이었다. 삼성 휴대폰 10대중 9대는 우리나라 밖에서 생산되는 게 현실이다.
　
이 때문에 삼성 휴대폰이 지구촌 곳곳에서 불티나게 팔려나가고 있지만, 정작 국내 구미공장의 일자리는 늘어나지 않고 있다. 삼성 구미공장 관계자는 “휴대폰 생산 인력은 9500~1만명 사이”라고 말했다. 삼성이 지난 2007년 베트남 진출로 국내 생산기반 축소를 우려하는 여론을 달래려 당시 1만명 수준이던 구미 공장 인력을 더 늘리겠다는 약속을 내놨지만, 5년이 지나도록 지키지 않고 있는 것이다.

이런 휴대폰 산업의 ‘외화내빈’ 현상은 비단 삼성에서만 일어나는 것은 아니다. 엘지와 팬택도 마찬가지다. 우리나라 휴대폰 업체들이 글로벌기업으로 고속성장한 이면에는 국내 일자리와 수출의 정체란 불편한 진실이 놓여 있는 것이다.
　
16일 지식경제부에 따르면, 지난해 말 기준 국내 휴대폰 업체의 해외 생산비중이 78.4%에 이르는 것으로 나타났다. 삼성, 엘지, 팬택 등의 로고가 찍힌 휴대폰 10대 중 8대가 해외에서 만들어지고 있는 것이다. 해외 생산비중은 2007년의 35.9%에서 불과 4년 만에 두 배 이상 급증했다.

삼성은 구미공장에서 월 500만대의 휴대폰을 생산할 수 있지만, 중국의 텐진•신천•해주 등 3곳과 베트남, 브라질, 인도의 삼성 공장은 모두 월 3500만대 안팎의 생산 능력을 갖추고 있다. 구미공장에서 생산되는 휴대폰은 2000년대 중반만 하더라도 월간 600만대가량이었으나, 지금은 되려 월간 100만대 수준으로 줄었다. 이제 삼성 휴대폰 대부분은 ‘메이드 인 차이나’ 또는 ‘메이드 인 베트남’인 셈이다.

엘지전자도 평택 공장(월 500만대)보다 중국과 브라질, 인도 등지에서 더 많은 약 800만대의 휴대폰을 찍어내고 있다. 팬택(외주 제외)은 김포에서 85만대, 중국에서 30만대의 월간 생산 능력을 갖췄다.
http://www.hani.co.kr/arti/economy/economy_general/519386.html

Financial Times: Bun Fight with the Chaebol

The challenges Korea is facing are multi-faceted and structural in nature. The Chaebol system is a part of it. I have discussed the perils of the Chaebol system many times.

The following article at the FT echoes some critical points I have made on this blog in that it touches on the structural issues Korea has to tackle in order to enhance its innovation/productive capacity.

And yet, what this article doesn’t address is the bigger picture as to how the Chaebol system could be born and prosper in the first place and how it is not going to be dissolved without a major reset in global financial reality.

The other important point one has to see re the Chaebol problem is that among policy failures during the Park regime in the early days of industrialization, perhaps one of the biggest errors is the institutional setup the administration engineered to grow the entrenched oligarchy system among civil servants, banks and Chaebols. It has persisted, hampering the wealth creating activities such as the rule of law.

From the FT:

South Korea is flustered about sticky buns, croissants and black puddings.

In the run-up to this year’s parliamentary and presidential elections, politicians have turned bakeries and black pudding vendors into a battleground where they are trying to vaunt their populist credentials.

Politicians have demanded the families behind Samsung, Hyundai and LG – the conglomerates that dominate the economy – stop selling patisseries and black pudding. The argument runs that it is unfair for big, bad conglomerates (known as chaebol) to move into food-stall territory traditionally occupied by small vendors.

The political rhetoric is melodramatic. Lee Joo-young, a lawmaker in the ruling conservative party, said it was grossly unfair that the chaebol were challenging back-street businesses.

“It’s like [Manchester United’s] Park Ji-sung trying to win at street football in the back alleys,” he said. Even Lee Myung-bak, the country’s president, has fulminated that daughters of the heads of Samsung and Hyundai should not be running bakeries as a pastime when they are putting people out of work.

All very dramatic – but the debate misses the point.

South Korea’s politicians have an uncanny knack for identifying the nation’s most serious problems – in this case the threat to national development posed by chaebol – and then prescribing ineffective medicine.

Asking big companies to step out of food retail is cosmetic. Keeping small vendors alive artificially is a way for the government to avoid substantial questions of restructuring tiny family businesses and providing a genuine social safety net.

Most crucially, cakes are not the problem. The issue is that the chaebol are stopping South Korea building up talent in Japanese-style or German-style small specialist engineering companies. If an entrepreneur starts to build innovative strength in Korea, the chaebol buys him out to strip staff and assets. South Korea is still reliant on engineering parts from Japan, with which it runs an eye-watering deficit. As China eats into Korea’s traditional export markets, Seoul faces a race against the clock to build up boutique engineers. Politicians aren’t even trying to crack this nut.

While the mainstream politicians claim they are making headway by keeping chaebol out of the pain-au-chocolat business, few Korean voters will be convinced. The danger to the status quo is an internet entrepreneur called Ahn Chul-soo who is a popular candidate among young people for president, though he has not said he will run. He is far more candid, saying that chaebol snuff out talent by putting fine minds in “zoo cages”.

It’s hard to imagine a complete outsider like Ahn could run Asia’s fourth-biggest economy. But if mainstream politicians keep focusing on cakes, he just might.

http://blogs.ft.com/beyond-brics/2012/01/27/s-korea-bun-fight-with-the-chaebol/#axzz1kjsbwYb4

Samsung and Sony Face New Contention over Pricing

Of course one has to understand this news in the context of the U.S. QE2 and export economies’ FX interventions.

From Bloomberg:

Sony Corp. gave up yesterday on a goal to profit from televisions this fiscal year and Panasonic Corp. forecast price drops will deepen this quarter. Earlier, Samsung Electronics Co. predicted “severe” competition for the year-end season, echoing comments from LG Electronics Inc. a day earlier.

Projections from the world’s four largest TV makers signal the industry will fail to capitalize on the biggest sales quarter of the year, with some analysts predicting price declines of as much as 25 percent in 2010. Companies from Microsoft Corp. to Intel Corp. are increasingly counting on corporate demand as consumers are reluctant to shop.

“There’s going to be a price war this Christmas season and there’s no way around that,” said Tsutomu Yamada, a market analyst at kabu.com Securities Co. in Tokyo. “The whole strategy this year is ‘sell earlier and sell for less.’ That makes life miserable for the manufacturers.”

TV makers were betting earlier this year that pricier LED TVs with brighter screens or 3-D sets would keep prices from falling the typical 20 percent to 25 percent annually, according to Atul Goyal, a senior research analyst at CLSA Asia-Pacific Markets in Singapore. That bet hasn’t materialized as pessimism has increased recently and shoppers in the U.S. aren’t willing to pay extra for higher quality sets.

U.S. retailers such as Target Corp. and Wal-Mart Stores Inc. are sweetening discounts ahead of the holiday season to move merchandise as joblessness hovers near a 26-year high. Target, the second-biggest discount retailer behind Wal-Mart, said this month it would lower prices on more than 1,000 toys to attract shoppers. Wal-Mart responded with its own discounts.

Sony Chief Financial Officer Masaru Kato said yesterday the maker of Bravia TVs is forecasting a loss from the business this fiscal year and the company is bracing for “harsh” competition. Sales of 3-D sets, projected to account for 10 percent of the 25 million annual TV target, are trailing Sony’s previous expectations, he said.

Panasonic, the world’s biggest maker of plasma TVs, said yesterday falling prices, the stronger yen and more expensive raw materials prevented the maker of Viera TVs from raising its full-year profit forecast even though earnings during the first half exceeded the company’s projections. The yen trading near a 15-year high against the dollar isn’t helping.

“The strong yen will be a major hurdle in the TV business in the second half,” Hideaki Kawai, the executive officer in charge of finance and accounting at Panasonic, said in Osaka yesterday. “It’s an extremely severe situation.”

South Korea’s Samsung and LG, the world’s two-biggest TV makers, have voiced similar concerns after the advantage of having a weaker won, the worst-performing major Asian currency from April to June, dissipated. The won’s 5.3 percent gain against the dollar since September makes it the region’s best performer during the period.

Samsung yesterday forecast earnings are poised to fall from their record high in the three months ended Sept. 30 and said competition in the TV market will be “severe” during the fourth quarter.

“We expect increased oversupply and price declines in the memory market, as well we possible further declines in LCD panels,” said Robert Yi, vice president of investor relations at Samsung. “Combining these with a possible appreciation of the won, we expect the overall fourth-quarter business conditions to be difficult.”

Fourth-quarter prices of LG sets will probably fall as much as 8 percent from the preceding three-month period, as TV makers clear mounting inventory, Chief Financial Officer David Jung said on Oct. 28.

“The Christmas season makes or breaks you and this year you’ve got unemployment and deflation,” said Yamada of kabu.com Securities.

http://www.bloomberg.com/news/2010-10-29/sony-samsung-brace-for-miserable-christmas-sales-as-tv-price-war-looms.html

Samsung and LG Head Race for New Growth Engine

Samsung announced the ambitious investment plans aimed at driving future growth on Monday. In a statement, it will invest 23 trillion won (roughly 20 billion USD) in five emerging businesses areas by the year 2020: solar cells, rechargeable batteries for hybrid cars, LED technology, biopharmaceuticals and medical equipment. There has been uncertainty over the company’s future business direction for some time. Lee Kyn-hee, the son of the company’s founder, returned as the chairman in March.

Meanwhile, LG will invest $18 billion between now and 2020 to develop environmentally friendly products and reduce its emissions by 40 percent. LG already started producing solar cells earlier this year and will open another factory next year.

While Samsung and LG have been the world’s most competitive corporations in certain areas such as LCD and mobile phones, they have engaged in fast follower strategy. If they succeed in this new endeavor, they will mostly likely be recognized as truly innovative companies.

How to Become Top Players by Profiting from a Crisis: the Case of Korea’s LCD Sector

Enterprises are the driving forces of an economy. Korea is one of a few newly industrialized countries that have had the high tech sectors as the major industries in the course of its rapid economic growth. The Korean economy has thrived on high-tech firms.

These are not normal times. Amid concerns over the governments’ expansionary measures, currency devaluation, oil exporters demanding new reserve currency, some corporations are faring relatively well. After all, businesses are central to job creation and income generation which hold up the economy. In this context, how some firms have taken profit greatly from the downturn by making the right moves is worth discussing. Hence, I’ll share some of my analysis on Korea’s success in the LCD sector.

The Korean LCD makers, Samsung and LG Display, are dominant players in display markets, occupying 54% of the global LCD market in Q2. Samsung is the world’s largest LCD maker and is expecting to see the sharp increase in operating profits for Q3, topping one trillion won.

There are several reasons behind their success. Among them, they made very astute strategic decisions during industry downturns. The Korean LCD makers entered the LCD business during industry downturns and took advantage of resource availability during this period.

Samsung and LG effected the entry during the second downturn in 1995-1996. Both Samsung and LG enabled to acquire the needed technology to build panels in the first downturn in the FPD industry in 1993-94 without licensing. Samsung set up an overseas R&D lab in Japan since Japanese engineers became available due to industry contraction. Samsung was capable of building Generation-2 pilot fab lines by incorporating the transferred knowledge into its DRAM technology base accumulated.

As was the case in the semiconductor sector, timing in terms of entering business or investing was very critical in the LCD industry. Whereas other incumbents were cutting back on investment due to falling prices, Samsung made bold countercyclical investment in 1995-96 before the upswing arrived in 1996-97.

During 1997-1998, due to the LCD market downfall and price fall again, the leading Japanese screen makers reduced their investment. However, Samsung foresaw a growing market demand for TFT-LCD panels and invested accordingly to target the major flat panel market. Thanks to this investment, Samsung occupied the Number One market share with 12.1 inch panels for the notebook computer in 1998. Samsung’s strategic bet is not limited to the LCD business. Samsung has been one generation ahead of other global contenders in the U.S., Japan, and Taiwan in the memory sector during an industry down.

Although Samsung did not own proprietary technology and was behind from Japan when it started the TFT-LCD business, it adopted and utilized the technology developed elsewhere to exploit the emerging opportunity in the sector. Samsung’s success demonstrates that with keen insight into competitive dynamics around volatile industry cycle, competitor’s move, technological possibility, and emerging applications for the panels, high-tech firms can become the market leader within a short timeframe.

Korean High-Tech Firms Exploiting Opportunities in Chinese Market

As the Chinese government’s expansionary measures are driving their growth, Korean firms including the major high-tech companies are taking advantage of the opportunities and act upon them accordingly.

Korean display maker, LG Display (formerly LG Philips LCD) has landed new deal with Guangzhou City to construct G8 (8th Generation) LCD fab. This means that China will begin producing LCD panels domestically for the first time, which will be another major step for China. China is the largest television market in which over 20 million flat panel TVs were sold last year.

Meanwhile, Samsung is reportedly considering building a semiconductor production line in China.

This move by Korean firms demonstrates the strategic shift in Chinese market. China is Korea’s largest trading partner: Korea’s trade volume with China was over 168 billion USD last year. Until now, China has been a base of exports to other countries, utilizing cheap labor production. 93% of Korea’s total shipments to China are comprised of parts and equipment for manufacturers. Currently, only 25% of products manufactured in Korean factories there are sold in Chinese market while about 75% of them are shipped off to other countries. Korean firms are setting up production facilities there to target China’s potentially profitable domestic market.

Interestingly, a Chinese official, Lou Jiwei, chairman of the sovereign wealth fund, China Investment Corp., seems to be reassuring Korean firms about their strategies for the Chinese market: “Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.”

Samsung's Success in TFT-LCDs

When Samsung entered the TFT-LCD industry in 1989, the Japanese screen makers reigned over the global market with more than 90 percent of the market share. Samsung was in a follower position in the early 1990s, and Sharp had the basic proprietary technology. Samsung could not generate any revenue for the next five years, but continuously invested since it foresaw the emerging opportunity with the flat panel displays.

Again, as was the case in the semiconductor business, Samsung pioneered among the Korean screen makers; other Korean firms followed Samsung’s lead after observing Samsung’s success. LG Phillips LCD also enjoyed almost equivalent levels of success.

Samsung TFT-LCD became a worldwide leader by gaining the top global market share within a short timeframe. How has it achieved its success?

Samsung climbed up to the leadership position by employing several undertakings…

For instance, Samsung has successfully found new applications for its panels, thereby opening up new markets…

Samsung has improved both production and product technology through…

Samsung reduced production cost through…

Samsung was nimble to invest heavily on the next substrate generations..

Note: A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.

Exploiting Opportunities during the Flat Panel Display Downturns

Fabricating flat panel displays requires high level technology and capitals to build and equip a fab. Thus this young flat panel business had not been easy for new entrants to enter...

The TFT-LCD business has shown the cyclical industry pattern. Along with the cycle of upturn and downturn, profits have risen and fell. The cycle of the flat panel display industry is called the “crystal cycle.” Although the industry was relatively young, it had demonstrated the cyclical character with distinct upturns and downturns. These fluctuations presented a unique opportunity for new entrants to penetrate the entry barriers during a downturn, which was extremely hard to get in, otherwise.

The Korean screen makers entered the TFT-LCD business during downturns and took advantage of resource availability in this period.

The two Korean firms, Samsung and LG effected the entry during the second downturn in 1995-1996 although Samsung started the TFT-LCD business in the early 1990, generating no revenue for the next 5 years; other Taiwanese firms entered during the third and fourth downturns...

Both Samsung and LG enabled to acquire the needed technology to build panels in the first downturn in the FPD industry in 1993-94 without licensing...

As was the case in the semiconductor sector, timing in terms of entering business or investing was very critical in the flat panel industry. Accordingly the screen makers had to make strategic bets regarding timing and investment scale for fab capacity. Samsung did it successfully...

Note: A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.

Coupling Marketing with Technology in Korea

In the case of Korea, the technological capability and marketing competence have been intertwined in the process of industry development. As Korean high-tech firms gained technological and marketing capabilities, their innovation capacity to convert market signals into innovative new products has been enhanced. This coupling process was a critical factor for their remarkable leap into the high-tech electronics industry of the digital age. Armed with marketing and technology skills, they have been able to take a bet on the new growth products such as multi-media styled phones and MP3 players.

Although leading Korean electronics firms such as Samsung and LG have depended on foreign chipset and operating software system, they have succeeded in satisfying the customers’ needs for smaller, lighter, and higher-quality cell phones by developing fashionable products with multiple functions such as handsets with MP3 players and camera phones. In other words, they bridged the technical and consumer experiences by successfully bringing them to the global marketplace.

Note: Only a glimpse of the analysis is posted.

Exploiting Industrial Design Advantage in Korea

A key role for R&D in technology-followers can be used to build independent industrial design capability. That is, with aesthetic design superiority, technology-followers can capture the higher value-added market segment. This is exactly what the Korean electronics firms have succeeded to move up the economic food chain.

LG electronics established an in-house design institute for the first time in the domestic industry. European design center was set up in Dublin, Ireland in 1991 and expanded its global design network by opening more centers in New Jersey and Tokyo in 1993, Beijing in 1998 and California in 1999. Samsung electronics also doubled its number of designers to 300, opened four design bureaus in U.S., Europe and Japan, and began picking up the international design awards. This move has reflected Samsung’s belief that products should be designed and developed in a way to reflect local customers’ tastes and preferences.

Note: The rest of the analysis won’t be shared due to the proprietary nature of the content.

The Korean Mobile Phone Industry: The Case of LG

Unlike Samsung which catapulted into a global leader in the mobile phone industry, LG experienced the hardship in getting into the mobile phone business, lacking a brand positioning. And yet, LG succeeded in building its premium brand power as well. For instance, it targeted its high-end handsets as means to create fashion by forging partnership with fashion brands including Prada. LG led the market trend by promptly launching its technology-laden handsets such as the camera phone and MP3 phone in the U.S. market.

Note: A part of case analysis on LG is shared due to the proprietary nature of the content.

The Korean Mobile Phone Industry: High-End Product Strategy

The leading Korean mobile phone companies entered the high-end market with cutting-edge products in the mobile phone industry while taking on the market leaders in the developed countries, instead of attacking low or mid-end saturated market. This high-end product strategy has been possible by anticipating industry trends and responding to customer needs quickly owing to technology-equipped early adopters and well-established IT infrastructure in Korea.

The high-end product strategy has contributed to boost the brand power of the Korean mobile phone makers. Since the Korean mobile phone companies such as Samsung and LG produce other high tech products as well, the brand recognition gained by the mobile phones has had positive ripple effects on other electronics goods.

Note: A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.

The Korean Mobile Phone Industry: Mid-Entry Strategy

Korea has adopted the mid-entry strategy in developing the CDMA-based mobile phones. The mid-entry strategy chooses the entry point of R&D projects in the mid-stage of technological development. This strategy uses research results already produced by someone else, but not commercially exploited.

ETRI, Korea’s government-sponsored research institute utilized the basic technology, the baseband chip, owned by U.S.-based Qualcomm and cooperated with local companies for the development of the CDMA-based digital handsets. Three chaebols, Samsung, Hyundai, and LG, and one medium-sized company, Maxon cooperated with ETRI to conduct the development project. In 1996 the first CDMA digital cellular phone service in the world was successfully commercialized. Lacking the basic research capacities, this mid-entry technology strategy seemed to be well suited for the Korean mobile phone makers.

Note: A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.

The Korean Mobile Phone Industry Development: Is It Really a Success Story?

Korea has transformed from an importing country relying on foreign firms and their technologies in its telecommunication industry up to the early 1990s to a formidable mobile phone exporting country in the recent years. As a result of intense efforts to advance the digital mobile phone system, the mobile phone business has been one of Korea’s backbone industries. The Korean mobile phone makers including Samsung and LG have enjoyed their world leader status in the highly competitive mobile handset market.

The successful CDMA-based mobile handset project has been considered to be one of the most exemplary cases for Korea’s high tech business development. The CDMA cellular phone service was successfully commercialized in 1996, ahead of all other countries. The Korean government successfully carried out the national R&D project for the CDMA-based handset. Of course, the private firms did their part in developing and commercializing the CDAM-based mobile phones.

The development of the CDMA-based technology is meaningful in two aspects. First, whereas the Korean high tech firms usually took the fast follower approach in the global electronic markets, they successfully exploited the first mover advantages in developing and commercializing the CDMA-based mobile phone system. Second, the successful development of the CDMA technology marked the rare public-private cooperation in the history of the high technology development in Korea.

However, one might raise a question as to whether the government’s role in the aggressive market development was appropriate. If the Korean government’s R&D policy in the mobile phone industry was so successful, as many have claimed, why can it be applied in another sector? It seems to be widely agreed that Korea has not come up with post-IT growth engine for economic development. Why can the Korean government’s insights and interventions used in the mobile phone business be applied in the next growth engine? Who has benefited the most from the Korean government policies? What are the drawbacks of the government’s excessive interventions?


Note: I have written an analysis of the Korean mobile phone industry development. Only a glimpse of it will be shared on this blog. If any of you might be willing to review and comment on my drafts (depending on your background and interests), please ping me.