Korean conglomerates like Samsung and LG that dabble in everything from semiconductors and rice cookers to selling insurance and ship construction have come a long way. I should know: I was born in Korea and have observed their growth and transformation into global companies with much interest. That being said, their weakness has always been the lack of creativity and innovation in their products. Do they have any sort of software products that they've developed to speak of? Of course, they're essentially hardware companies but having been OEM suppliers (and still are to a large degree with chips and flat panel displays), it's still all about volume manufacturing with them.
I was reading a recent annual report by Samsung Electronics after they did $119 billion in sales in '09. Now that's only the Samsung conglomerate's Electronics division. I suspect they'd be well over $200 billion if you factor in all these other unrelated businesses they operate. Anyway, the report also stated their goals to achieve by 2020: $400 billion in annual sales, one of the world's top 5 brands (I think Fortune listed them around 95 or something like that recently), and one of the top 5 most admired companies, etc. LG, obviously, would have similar goals. LG Electronics is in the $70 billion range.
In many areas, Samsung and LG are collectively beating the hell out of Japanese electronics giants like Sony, Panasonic (formerly Matsushita) and Toshiba. They've lifted themselves nicely out of the bargain basement realm and have become respected global consumer electronics companies while growing their revenues to gargantuan levels. Samsung will soon be much larger than HP in terms of revenues. Sony and Panasonic have stagnated at around $80 billion for years and will soon be overtaken by LG. But can they take it to the next step in this brave new world of convergence between high-tech and consumer electronics?
Now we have the likes of US high-tech companies like Apple, Microsoft, HP, Dell, etc. competing against consumer electronics titans likes of Sony, Samsung, LG, Toshiba, etc. and this brawl will make what we've witnessed in the tech industry over the past 20 years seem tame in comparison. You throw in the major telecom players and content providers around the world and this battlefield is one amazingly complex soup of alliances, double-crosses and intense cutthroat wars. This sure beats following MLB and NFL!
I just don't think the strategies of these do-it-all companies like Sony, Samsung and LG will work in this new battlefield as they take on Apple and other US high-tech companies. You can bet that HP is going to go all-out to fight in this space as well. And I don't expect Dell to be a slouch with the resources they have. Overall, the companies that create and control the software and the platforms will be the ones at the leading edge and this is not something the Asian manufacturers have. That's why all the focus is on Apple vs. Google (with Microsoft joining the fight soon).
Still, the next 10 years will be very
interesting. A lot of companies that seemed dominant (or at least in a very strong market position) only several years ago may not be around by 2020. Samsung and LG are going to be serious players for sure (with the help of Google), but I believe Apple and HP will carve out their own turf and be able to defend it as this new market evolves. It's really difficult to say what will happen with Nokia and RIM. And we have no idea if Microsoft will become a player with their mobile software strategy. There's never been a business war like this one that's only getting started now. It's only like the second inning or midway through the first quarter. I don't believe it'll be a blowout like what Microsoft did during the PC era. I believe this will go down to the wire and stay that way for a long, long time to come. For us consumers, I think that'll be the best outcome.