The Inside Story of the South Korean Giant That Set Out to Beat Apple and Conquer Tech

376 Pages·2020·11.93 MB·english

by  Geoffrey Cain

Copyright © 2020 by Geoffrey Cain
All rights reserved.
Published in the United States by Currency, an imprint of Random House, a
division of Penguin Random House LLC, New York.
CURRENCY and its colophon are trademarks of Penguin Random House LLC.
Hardback ISBN 9781101907252
International edition ISBN 9780593236703
Ebook ISBN 9781101907269
randomhousebooks.com
Book design by Debbie Glasserman, adapted for ebook
Photos courtesy of the author unless otherwise noted.
Cover design: Lucas Heinrich
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Contents
Cover
Title Page
Copyright
Note on Research, Translations, and Korean Names
Cast of Characters
Chapter 1: Galaxy Death Star
Chapter 2: Shadow of Empire
Chapter 3: Dynasty Ascendant
Chapter 4: March of the Samsung Men
Chapter 5: The Confucian and the Hippie
Chapter 6: The Fifth Horseman
Chapter 7: The Scion
Chapter 8: Glorious Chairman!
Chapter 9: Church of Samsung
Chapter 10: Go West, Young Heir
Chapter 11: Seoul Searching
Chapter 12: Design Revolution
Chapter 13: My Boss the Shit Kicker
Chapter 14: Sony Wars
Chapter 15: Bordeaux
Chapter 16: Unholy Alliance
Chapter 17: The Emperor Has No Clothes
Chapter 18: Guardians of the Galaxy
Chapter 19: Cult of Steve
Chapter 20: Coke Pepsi Redux
Chapter 21: The Next Big Thing
Chapter 22: Galaxy Trilogy
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Chapter 23: The Ecosystem
Chapter 24: White Glove
Chapter 25: Milk
Chapter 26: The Selfie That Shook the World
Chapter 27: Return to Tradition
Chapter 28: Vulture Man
Chapter 29: My Kingdom for a Horse
Epilogue
Dedication
Acknowledgments
Notes
About the Author
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Note on Research, Translations, and Korean
Names
I INTERVIEWED MORE THAN four hundred current and former Samsung
employees, executives, politicians, businesspeople, board members,
journalists, activists, and analysts, as well as a member of Samsung’s
founding Lee family. Samsung did not cooperate with this book. Most of
my interviews were through unofficial channels. Samsung, however,
cooperated with my earlier magazine reporting for Time and Fast
Company. Those official interviews are included.
The interviews took place in South Korea, Japan, China, New York,
New Jersey, Texas, and California. Many interviewees did not want to be
named or go on the record. I have respected their wishes. Many graciously
offered to help me, knowing their careers were at great risk, and with little
benefit to themselves.
Interviews were conducted in Korean, Japanese, and English,
depending on the needs of the interviewee. Many Korean figures of speech
don’t translate fluidly into English. I have double-checked these statements
with the subjects to ensure that the original intent was not lost, with the
help of my researcher, Max Soeun Kim, talented young Guardian stringer
and native Korean speaker.
This book follows no single convention for Korean names. It follows
the personal preferences of the people I interviewed and wrote about. Most
Koreans prefer the standard usage: family name first, given name second.
On second mention, some write their given names as initials. Lee Byung-
chul, for instance, becomes B.C. Lee. Sometimes Koreans prefer to
hyphenate their given names (Lee Kun-hee). Sometimes they leave out the
hyphen (Park Chul Wan). The Revised Romanization system is used
throughout.
Researching this book, I used a mixture of investigative journalism and
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ethnography methods, drawing on my academic background in
anthropology. For archival research, I consulted the collections at my
graduate-school alma mater, the School of Oriental and African Studies at
the University of London, as well as the Presidential Archives and
National Assembly Library of Korea.
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Cast of Characters
I. THE KOREANS*1
Chairman Lee Byung-chul (B.C. Lee, also known as Chairman Lee I) (1910–
1987). Founder and first chairman of the Samsung Group, from 1938 until
his death in October 1987.
Chairman Lee Kun-hee (K.H. Lee, also referred to as Chairman Lee II) (b.
1942). Son of B.C. Lee and second chairman of the Samsung Group, from
1987 to the present, who transformed Samsung into a global nameplate
brand. He suffered a heart attack in May 2014 and has not been seen in
public since.
Vice Chairman Lee Jae-yong (Jay Y. Lee, tapped to become Chairman Lee
III) (b. 1968). Son of K.H. Lee and heir apparent to the Samsung empire,
he was sentenced to five years in prison for bribery and embezzlement.
Released early from prison on appeal, a panel of judges upheld but
lessened the extent of his bribery conviction. He awaits retrial after
Korea’s Supreme Court voided his second ruling, and may be sent back to
prison with possibly expanded charges.
Lee Maeng-hee (1931–2015). Oldest brother among B.C. Lee’s three sons. He
was the favored heir to the Samsung Group before he resigned in 1969,
accused by his father of mismanagement.
Lee Mie-kyung (Miky Lee). Daughter of Lee Maeng-hee, niece of Samsung
chairman Lee Kun-hee, and Samsung’s emissary to the U.S. entertainment
and design industries before leaving to start her own production house, CJ
Entertainment, in a partnership with DreamWorks.
Hong Jin-ki (1917–1986). Samsung founder B.C. Lee’s political ally and
former head of Samsung’s JoongAng newspaper. His family forged an
alliance with Samsung’s founding Lee family. His daughter Hong Ra-hee
married Samsung chairman K.H. Lee.
President Park Chung-hee (1917–1979). Dictator of South Korea starting with
his military coup d’état in 1961 and ending with his assassination in 1979.
He laid the economic and political foundation for the Korean economic
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miracle, bolstering companies like Samsung and Hyundai.
President Park Geun-hye. Daughter of dictator Park Chung-hee. As the
democratically elected president of South Korea from 2013 to 2017, she
was implicated in organizing almost $38 million in bribes from Samsung
for her political ally. President Park was removed from office and jailed in
March 2017.
Lee Ki-tae (K.T. Lee). No relation to the ruling Lee family. K.T. Lee was the
CEO of Samsung Electronics’ mobile phone unit from 2000 to 2007. He
started out as a factory floor manager; as CEO of Samsung’s mobile phone
unit, he elevated the quality and durability of Samsung mobile phones and
brought them to the U.S. market.
Hwang Chang-gyu. President of Samsung’s semiconductors unit from 2004 to
2008, and chief technology officer of Samsung Electronics from 2008 to
2010. Hwang made a key deal with Apple’s Steve Jobs in 2005 to supply
chips for the iPod and later the iPhone, spurring Samsung’s explosive
growth.
Choi Gee-sung (G.S. Choi). Formerly the powerful lieutenant to Samsung’s
ruling Lee family and head of the Future Strategy Office, Samsung’s
highest body that houses many of the elite executives, known as “the
Tower.” Now serving a five-year prison sentence for bribery and
embezzlement.
Shin Jong-kyun (J.K. Shin). CEO of Samsung’s mobile unit from March 2013
to December 2015. He oversaw the kick-starting of the Galaxy smartphone
line and helped to initiate the smartphone wars against Apple.
Koh Dong-jin (D.J. Koh). Successor to J.K. Shin and CEO of Samsung’s
mobile unit from December 2015 to the present. He oversaw the recall and
cancellation of the Galaxy Note 7 after the product began catching fire.
Sohn Dae-il (“Dale”). CEO of Samsung Telecommunications America from
2006 to August 2013. He helped lead the smartphone wars against Apple.
II. THE AMERICANS
Peter Arnell. Hired by Chairman Lee II to bring cutting-edge, fashion-based
advertising to Samsung products in the mid-1990s, when the company was
known as a manufacturer. Former head of the Arnell Group in New York.
Gordon Bruce. Design professor at ArtCenter in Pasadena, California. Co-
founder of the Innovative Design Lab of Samsung (IDS) from 1995 to
1998.
Pete Skarzynski. Vice president for sales and marketing at Samsung’s
American unit from 1997 to 2007. With K.T. Lee, he brought Samsung
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mobile phones to the American market.
Eric Kim. Executive vice president and then chief marketing officer at
Samsung Electronics from 1999 to 2004. Through his branding and
advertising campaigns, Samsung overtook Sony in brand value and sales
by the mid-2000s.
Todd Pendleton. Chief marketing officer at Samsung’s American mobile unit
from 2011 to 2015. Led advertising efforts against Apple during the
Samsung-versus-Apple smartphone wars.
Daren Tsui and Ed Ho. Two Silicon Valley entrepreneurs who got their start
working with Elon Musk and later sold their music software, mSpot, to
Samsung in May 2012. After the sale, they joined Samsung as vice
presidents for content and services; they ran the grand experiment Milk
Music until its closure in September 2016.
Paul Elliott Singer. Founder and CEO of Elliott Management, an
ultrasecretive hedge fund in New York. Known to many in the industry as
“the Vulture.” He challenged Samsung in court and in shareholder votes as
the company set out to install its heir, Jay Lee, as the next chairman.
III. THE JAPANESE*2
Tameo Fukuda. Design adviser to Chairman Lee II and author of the June
1993 “Fukuda Report” that forced Samsung to improve its product quality.
*1 I’ve listed the family name first and the given name second.
*2 Given name first, family name second.
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