Inside the brutal war for smartphone dominance: there is a growing divide between those who use Apple’s iPhones and those who use smartphones from HTC, Samsung, and Nokia, which ran Google’s quickly growing open-source operating system, Android
—president of Samsung’s semiconductor and memory business—traveled with two fellow executives to Palo Alto, to the home of Steve Jobs.
“This is exactly what I wanted,” Jobs said of Samsung’s flash memory, according to Hwang. He agreed to make Samsung the sole supplier of flash memory for the iPod. In April 2011, Apple filed multiple lawsuits, spanning dozens of countries, against Samsung for patent infringement. It demanded $2.5 billion in damages. Samsung quickly countersued for infringement of five patents relating to its wireless and data transmission technology.Samsung executives felt Apple was trying to create a monopoly with generic patents like the iPad’s black rounded rectangle shape, a patent so silly that a court threw it out. “We are going to patent it all,” Jobs once said.
“We need more creativity!” Dale Sohn, the CEO of Samsung Telecommunications America, the Texas mobile phone office, exclaimed in a meeting in 2010, according to a senior manager who was present. Dale reported to mobile chief J.K. Shin. He had been tasked with turning things around in America, Samsung’s toughest market, given the iPhone’s huge popularity.
In 2011, at Samsung’s U.S. headquarters, Pendleton gathered about fifty people into a meeting. He approached the whiteboard and wrote: “Samsung=?” In focus groups and surveys, the marketers noticed, there was a growing divide between two camps: those who used Apple’s iPhones and those who used smartphones from HTC, Samsung, and Nokia, which ran Google’s quickly growing open-source operating system, Android.Smith Collection/Gado/Getty Images
Because Apple was an important Samsung customer, the executives at headquarters were pushing for a cautious approach. They wanted to take down each competitor, from HTC to Motorola to BlackBerry to Apple, one by one over the next five years. A visiting delegation of South Korean executives huddled in a conference room to watch the video of these Times Square interactions. They were aghast. Suddenly Pendleton had their ear. The research—the field testing—had been done for internal consumption only. It was designed by Pendleton to get the South Korean executives to grasp the size of the problem.
Once Samsung had the marketing budget to reach out directly to customers, Pendleton could initiate step three: hiring an ad agency. He annoyed Samsung headquarters by going around their established Madison Avenue and Seoul agencies and instead putting in a call to relative newcomer 72andSunny, a boutique advertising firm with offices in Los Angeles, New York, and Amsterdam that had a special zing for cultural marketing.
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