CH146 | Heir

Entering the 2000s, Samsung Electronics became the company with the highest market capitalization in Korea.

Although the group's overall rank in the business world was still behind Taewoo Group at second place, Samsung Electronics stood as Korea's number one company when viewed as a single corporate entity.

Samsung Electronics was powerful enough to rival entire conglomerates.

The company had two vice chairmen, five presidents, and over ten executive vice presidents — all wielding enormous power. Now, they were fiercely debating in the conference room.

“Are you suggesting we sacrifice the semiconductor division to protect the mobile division? Apple is about to purchase 3 million units of semiconductors — how can we afford to alienate one of our largest customers?”

“When did we ever try to alienate Apple? The WIPI regulation was a decision made by the Broadcasting Commission. It has nothing to do with Samsung Electronics.”

“Do you think anyone will believe that? Even I don't believe it — how would Apple? Rumors that we're colluding with telecom companies to block the iPhone's Korean release have already spread — not just in Korea, but all the way to the U.S..”

The semiconductor and mobile division executives raised their voices, their anger boiling over.

If this continued, it wouldn't be long before fists started flying — prompting Vice Chairman Jung Hyun-woo to step in and mediate.

“Calm down, everyone. Let's find a way for both the mobile and semiconductor divisions to achieve a win-win outcome.”

“With the U.S. threatening to invoke the Super 301 Clause, there's no way both divisions can benefit.”

“This isn't the first time the U.S. has wielded the Super 301 as a threat. But they've never actually enforced it. It's nothing more than a pressure tactic.”

Vice Chairman Jung massaged his temples.

The situation was far too complex.

The mobile and semiconductor divisions were Samsung Electronics' two largest revenue drivers — he couldn't afford to take sides.

When the mediation faltered, the shouting resumed.

It was the mobile division that struck the next blow.

“Let's be honest — what money is keeping the semiconductor division afloat? This quarter alone, the semiconductor division recorded over 200 billion won in losses. We're covering that deficit by selling mobile phones!”

“So your solution is to kill off the semiconductor division entirely? We need to secure more clients to turn a profit — but how can we do that if the mobile division is driving our customers away?”

The situation spiraled out of control.

The division heads' voices only grew louder — until the conference room door creaked open.

“Is this a marketplace or a boardroom? Why are you all yelling like common peddlers?”

“C-Chairman! My apologies.”

Chairman Oh Hee-gun had arrived.

If Taewoo Group had Chairman Kim Tae-joong, then Samsung Group had Chairman Oh Hee-gun.

He had fought his way through a brutal succession battle to become the head of Samsung Group — and with his exceptional business acumen, had elevated the group to second place in the business rankings.

“I hear the U.S. is threatening to invoke the Super 301 Clause. And now Apple is talking about canceling their contract?”

“They've said they won't work with companies that undermine their clients.”

“Oh... Is Manager Lee here? Tell me — is Samsung Electronics' mobile phone so uncompetitive that you need to block the iPhone's release?”

“N-No, sir! Samsung's mobile phones are the best in the world.”

“Then why are you blocking the iPhone's launch? Is it to protect your market share?”

“The iPhone is entirely different from any phone we've seen before. We simply need time to analyze the product and prepare.”

Lies were useless before Chairman Oh.

The mobile division head could only reveal his true intentions.

“I understand your reasoning. But tell me — if blocking the iPhone means we can't sell our phones in the U.S., what good will that do?”

“If you're referring to the Super 301 Clause, there's no need to worry. We've already dispatched lobbyists to the White House, the Senate, and the House of Representatives.”

“Tsk, tsk... Do you think any politician would support a move that goes against their national interest? No matter how much you pay your lobbyists, such lobbying is impossible — why don't you understand that?”

Chairman Oh Hee-gun had already grasped the situation in the U.S.

Through his own private channels, he had gathered information from the American political sphere — confirming that lobbying would be futile in this case.

“Even if it goes against their national interest, I still believe the matter can be resolved through lobbying.”

“Does the telecom cartel have that much money? Are you saying you can outspend Wall Street?”

“Wall Street... Are you referring to U.S. investment firms?”

“Don't you even know who owns Apple? The majority of Apple's shares are held by Wall Street investment firms. And the ones pouring the most money into American politics are those very firms. Do you really think you can win against them?”

“…….”

Chairman Oh clicked his tongue.

At the sound, the mobile division president hung his head.

“If you're confident you can win, I'll back you. But the moment you lose... remember that Samsung Electronics could go bankrupt. Not just Samsung — this could bring down the entire Korean economy.”

“I apologize. I didn't think things through.”

“Tsk, tsk... You're trying to navigate American politics the same way you do in Korea — that's why this mess happened.”

Chairman Oh coldly turned his head.

He then addressed the semiconductor division executive, who had been quietly waiting.

“If we sign a new contract with Apple, can we resolve the deficit issue?”

“We won't be able to wipe out the deficit entirely, but it would significantly reduce the losses.”

“But is it possible for Apple to produce the iPhone without using Samsung Electronics' semiconductors? If our semiconductors are essential components, then the roles of client and supplier would be reversed.”

“They can manufacture the iPhone using Taewoo Semiconductors or Japanese semiconductors. However, there would be issues with performance and cost — though not to the extent that production becomes impossible.”

Samsung Electronics was indeed a leader in the semiconductor market.

However, the gap between Samsung and other semiconductor companies wasn't insurmountable.

“There's nothing more to discuss, then. Withdraw the WIPI regulation.”

“But Chairman, we've already made agreements with several companies. The telecom companies, in particular, will strongly oppose this decision.”

“We might have to shut down the mobile division entirely — and you're worried about some local telecom companies?”

Telecom companies and mobile manufacturers shared something close to a vertical relationship.

Since mobile phones could only be sold through telecom companies, the carriers were often seen as the superior party.

However, it wasn't as if Samsung Electronics could be treated as a mere subordinate.

Perhaps “Super Subordinate” would be a more fitting description.

If Samsung Electronics failed to deliver mobile phones on time, telecom companies would suffer massive losses — making it impossible for them to completely disregard Samsung Electronics.

“Resolve the issue before the whole country starts whispering that the nation will collapse because of Super 301.”

“Understood. We'll take action immediately.”

***

Two days later.

The chief of planning came in with very welcome news.

“The Broadcasting Commission has announced that the WIPI mandatory installation regulation will be postponed.”

“They're trying to save face by calling it a postponement instead of an outright repeal, aren't they?”

“You could say that — but in reality, it's practically the same as a repeal.”

“Does that mean the iPhone can now be officially launched in Korea?”

“Yes. As soon as you give the order, the iPhone can be sold in electronics stores nationwide.”

“Then start sales immediately.”

Normally, when a new product was launched, companies would run massive advertising campaigns before releasing it.

Naturally, we'd already shot several versions of iPhone commercials — but due to the WIPI issue, those ads had been on hold.

Now that the issue had been resolved, it would have been standard practice to run ads for a few days before launching the product.

However, thanks to the media frenzy surrounding the Super 301 Clause and the telecom cartel's obstruction, the iPhone had already enjoyed more than enough free publicity.

“Begin sales as soon as the stores open.”

The chief of planning hurriedly got to work.

He resumed the delayed iPhone commercials and notified all electronics stores across the country to start selling the iPhone.

By the time the busy chief returned to me, it was nearly lunchtime.

“Vice Chairman! We've got a serious problem.”

“What is it now? Is the telecom cartel interfering again?”

“No, sir... The initial stock has already sold out.”

“How is that possible? We brought in 100,000 units for the initial batch — it's impossible for them to sell out in half a day.”

“Only 20,000 units were actually sold, but more than 30,000 customers have already placed pre-orders. If this pace continues, the entire initial stock will be gone within the week.”

I'd expected a strong response — but this far exceeded my expectations.

Ironically, the telecom cartel's obstruction had worked in our favor.

The iPhone's involvement in the Super 301 dispute had turned it into a hot topic on the news.

On top of that, we'd been quietly carrying out targeted promotions near electronics stores and university districts — making the iPhone launch feel like a forbidden fruit.

Naturally, customers had flocked to stores the moment sales began.

“Contact Apple headquarters and request additional supply. Tell them we'll arrange for direct pickup from the Chinese factory ourselves.”

“I've already contacted them. But the U.S. is also facing a supply shortage — they can't allocate much additional stock.”

“They're preparing to launch in Europe soon, so the shortage must have started already.”

“Yes, sir. Apple headquarters is on high alert over the supply crisis.”

There were no issues with component supply.

The problem was simply that the assembly factories were too small — resulting in limited production capacity.

“Hmm... We can't just sit around waiting.”

I tapped my finger on the desk, deep in thought.

“Could Taewoo Electronics manufacture the iPhone for Apple?”

“If we utilize small-scale assembly plants, production is possible. Additionally, we could mobilize our workforce to produce iPhones at the Taewoo mobile division factory, which Apple acquired.”

“Then proceed immediately. At least for the Korean market, we must ensure there is no shortage of supply.”

“Using the Taewoo factory would solve the supply issue... but the production cost will not be viable.”

The reason Apple had set up assembly plants in China was lower labor costs.

If production were shifted to Korean factories, the unit cost would inevitably skyrocket.

However, raising the already high retail price of the iPhone would be out of the question.

“We’ll absorb the loss on our side if necessary. What matters is securing enough supply to boost Taewoo Telecom’s market share.”

“I’ll begin negotiations with Taewoo Electronics right away.”

Taewoo Telecom held the exclusive sales rights for the iPhone.

The more iPhones sold, the more customers flocked to Taewoo Telecom.

It also increased the likelihood that customers from rival carriers would switch to Taewoo.

In the end, even if the higher production costs ate into their profits, the overall gains from market share expansion would far outweigh the loss.

Securing sufficient supply was no longer just a business decision — it was a strategic necessity.