Once a copycat, the Korean giant has money, market share, and strong new products. Now it wants respect. This sums up the meteoric rise of Samsung Electronics, which has been ranked 42nd among the best global brands by Business Week magazine in its latest issue.
Last year, it ranked fifth in the world in patents, behind IBM, NEC, Canon and Micron Technology — but ahead of Matsushita, Sony, Hitachi, Mitsubishi Electric and Fujitsu.
A team of top executives of Samsung Electronics and its local distributor United Matbouli Group gave an overview of Samsung’s success in an interview with Arab News at Jeddah Hilton yesterday. They included B.W. Lee, vice president, Middle East & Africa Headquarters, and General Manager Jung Weon Cha and Senior Manager Dal Jae Kim, both of the Jeddah office — all from Samsung Electronics, and Adnan Mahmoud Matbouli, vice chairman of the United Matbouli Group.
“Samsung Electronics has become a truly innovative company, creating cutting-edge technology across a spectrum of product lines, including combined cell phone and handheld devices, flat-screen TVs, and ultrathin laptops,” Lee said.
Samsung Electronics made $2.2 billion in 2001, on sales of $24.7 billion. It has built strong positions in memory chips in which it is the world leader, Lee claimed. It also holds strong positions in thin-film displays (first), and wireless communications (fourth in handset production).
Success, of course, brings a new set of challenges. For one thing, now that Samsung Electronics is creating more of its own technology and upgrading its brand, its relations with customers and allies will become more complex. “It’s selling chips to Microsoft, but at the same time Samsung is developing an instant-messaging phone with Microsoft rival AOL Time Warner (parent of Fortune’s publisher).
Samsung Electronics is not content with being one of Korea’s most successful companies or even with outsmarting its Japanese rivals. It wants to become Korea’s first great global company. The company has already established its brand as a top-of-the-line choice for consumers in places like Russia and China. And it is a valued partner to US firms like Dell, Hewlett-Packard, Compaq and IBM, for which it makes components, according to Lee.
But Samsung, with its 17 manufacturing plants worldwide, wants to be more than a supplier with a good reputation. It wants its brand to be seen in the West among the best. So it is spending $400 million this year on a marketing campaign, including a high-profile role at the Salt Lake City Winter Olympics.
“We’ve 30 percent market share in semiconductors and 20 percent in LCD, and we’re No. 1 in CDMA (handset) and third in GSM. In the Kingdom we’re focusing on our 50-inch and 60-inch projection TV. We’re among top three in DVD players and hold 23 percent of the market in washing machines and 22 percent in refrigerators,” Lee said, adding that in GSM the company expected to go into the second position.
Detailing the company’s new products, he said the T100 color GSM was the first of its kind in the world introduced in the Kingdom.
The company’s DVD Combo, with five functions including DVD, videotape, video CD, CD and MP3, has been launched in the US and the Kingdom, with a 12 percent market share.
Asked how competitive was the market, Kim said: “Manufacturers and companies not having leadership will have to disappear.”
Nexio with its five-inch screen was the next generation Internet office that worked on wireless communication. Its three functions included computer PDA and wireless GSM. This would be introduced in the Kingdom shortly, Lee added.
Asked whether the local company was considering an assembly plant in the Kingdom, Matbouli said: “We conducted a study and found such a plant not economically feasible at present.”