CH144 | Heir

The long-awaited June had arrived.

With the start of the second half of 2001, the iPhone was released.

Expectations had been heightened at CES, and the explosive response followed.

However, the scale of the explosion was beyond expectations.

Electronics stores across the United States were crowded with people trying to purchase the iPhone, and there were even tourists from Europe visiting the U.S. just to buy one before its official release in their own countries.

The head of the planning department reported all these situations to me.

I felt both joy and bitterness.

"It's a huge hit in the U.S., but we can't even launch it in Korea."

"The telecommunications cartel is strongly blocking the iPhone's release. The WIPI regulation, which was scheduled to start in July, was moved up by a month entirely to keep the iPhone in check."

I couldn't have imagined that the iPhone's release itself would be blocked.

The telecommunications cartel had conducted large-scale lobbying of politicians and the Broadcasting Commission.

Even Samsung Electronics and CL Electronics joined the lobbying, making it inevitable for the political sector to take action.

The politicians also had their justification — protecting domestic products.

The argument was that if the iPhone entered the market, domestic phone manufacturers would suffer significant damage, so they had to block its release.

Honestly, it was an absurd justification.

But with the telecommunications cartel backing them, they were able to push through aggressively and ultimately succeeded in blocking the iPhone's release in Korea.

"How many iPhones have arrived in Korea?"

"The initial shipment of 100,000 units arrived last week."

100,000 units was not a small number.

Especially since it was only the initial shipment — the longer the delay, the greater the damage to both Apple and Taewoo Group.

"It's a ridiculous situation — having the product but not being able to sell it."

"If the regulation is lifted, we can start selling them immediately. But since the telecommunications cartel is blocking with all its might, it's uncertain whether we'll be able to launch this year."

The head of the planning department was full of worry.

On the other hand, I wasn't too concerned.

"Let's wait a little longer. The situation will change by the end of this month at the latest. If the iPhone creates a craze in the U.S. market, Korean customers will naturally demand its release."

"Even now, thousands of customers inquire about the iPhone's release every day."

To defeat the telecommunications cartel, we needed a cartel of our own.

It was also important whose side the customers buying the phones would take.

The more customers who wanted the iPhone, the weaker the telecommunications cartel's justification would become.

"The stronger the iPhone craze, the more advantageous it will be for us. So, please put all Taewoo Group's efforts into promoting the iPhone."

"Taewoo Electronics stores in the U.S. are already running large-scale promotions for the iPhone."

"Increase the promotional budget. The craze will happen on its own, but we need to accelerate its speed."

****

The telecommunications cartel held another meeting.

It was attended by telecommunications companies, excluding Taewoo Telecom, along with Samsung Electronics and CL Electronics.

They raised their glasses in celebration, creating a harmonious atmosphere.

"Thanks to WIPI, the advancement of Korea's telecommunications industry is highly anticipated!"

"It's all thanks to the chairman's efforts."

They genuinely praised one another.

For electronics companies, blocking the iPhone's release helped maintain their phone sales.

For telecommunications companies, preventing wireless internet allowed them to extract more data fees.

And for the Broadcasting Commission, receiving the telecommunications cartel's sponsorship made everyone happy, fostering sincere compliments.

"Taewoo Group is in a difficult position. Won't they soon lose their top spot in the telecommunications industry?"

"With the help of Samsung and CL Electronics, it's not an impossible task. We look forward to your support for our new products."

"Taewoo Telecom will face a slight penalty. While we can't block the supply entirely, not allowing them to use the product name should suffice, right?"

"Just like Hong Gil-dong couldn't call his father 'father,' Taewoo Telecom will have to refer to the phone by its model number instead of its name! What a brilliant method!"

Phones had various names.

Samsung Electronics' new product was called Anycal.

However, if Samsung Electronics refused to allow the name Anycal, Taewoo Telecom would have to promote it as SCH-480 instead.

It wasn't a severe penalty, but it could confuse customers and potentially lower Taewoo Telecom's market share.

A despicable and childish method.

Yet the telecommunications cartel, being a massive group, felt no shame using such tactics.

"By the way, they're calling the iPhone a smartphone, right? Do you think the era will shift from feature phones to smartphones?"

"People prefer familiar devices. And with laptops around, who needs smartphones? At CL, we aren't even considering entering the smartphone market."

"There's a buzz in the U.S., but it'll fizzle out soon. At first, people might enjoy the novelty, but eventually, they'll realize there's no reason to pay such a high price for the iPhone."

The telecommunications cartel was skeptical about smartphones.

Electronics companies, holding high global market shares for feature phones, had no intention of abandoning them.

Telecommunications companies favored feature phones to maintain expensive data plans.

"I'll buy everyone a round."

"Shall we propose a toast?"

"Do you have a good toast in mind?"

"Shouldn't we acknowledge Taewoo Group, who couldn't join us today?"

"That's an excellent idea."

"To Taewoo Group!"

"Cheers!"

The telecommunications cartel mocked Taewoo Group with their toast.

As more drinks circulated, deputy-level staff from the Broadcasting Commission and senior executives from each company rushed into the meeting room.

"The U.S. has invoked Super 301."

"What? The U.S. has invoked Super 301 against Korea?"

"That's correct. They condemned the regulations blocking the iPhone's release and invoked Super 301 against Korean mobile phone and automobile companies."

Super 301.

A law that allowed unlimited retaliatory measures against countries hindering U.S. interests.

If officially enacted, Super 301 would prevent Korean mobile phones and cars from being sold in the U.S.

It would be a severe blow to the Korean economy, reminding everyone in the telecommunications cartel of the foreign exchange crisis.

***

That evening.

I raised a toast with David in Captain Kang's office.

"Well done. I thought it would take more time since President Bush was negative about Super 301, but thanks to your efforts, it was invoked today."

"The iPhone's popularity made it easier. It helped us move the White House without much difficulty."

I had provided significant funding to the Bush campaign.

However, even with that support, I couldn't orchestrate something as monumental as Super 301 alone.

It was possible because our interests aligned.

The U.S. naturally wanted the growth of its own companies.

We wanted the iPhone to be released in Korea, with no conflicting interests.

"The Korean government must be in chaos. They're aiming for an early IMF graduation, and now they've hit the roadblock of Super 301."

"According to the line, high-ranking officials have been summoned to the Blue House. But I'm curious—why did you include the mobile phone and automobile industries in Super 301? Wouldn't that cause massive losses to Taewoo Group, which owns a car company?"

"We need allies."

To counter the telecommunications cartel, we needed our own cartel.

If the telecommunications cartel was formed to pursue mutual interests, we had to unite to prevent losses.

If Super 301 blocked car exports to the U.S., wouldn't Hyundai Motor naturally protest?

To face Samsung Electronics and CL Electronics, forming an alliance with Taewoo Group and Hyundai Motor was essential.

"Hyundai Motor got caught in the crossfire."

"Since they're affected, they'll need a scapegoat. The telecommunications cartel, which triggered this situation, is the perfect target."

"It will also cause divisions within the telecommunications cartel. Telecom companies won't be harmed, but mobile phone companies will suffer significant sales losses if U.S. exports are blocked."

"How many phones can they sell in Korea's small market? If U.S. exports are blocked, their sales will be halved."

If the telecommunications cartel used the Broadcasting Commission, I would counterattack using the White House.

I wouldn't have chosen this path if I had another option.

This move could severely impact Korea's economy—but the telecommunications cartel had left me no choice.

"Won't the telecommunications cartel retaliate? They have the financial resources to lobby U.S. politicians."

"Under different circumstances, they might. But who would accept such lobbying when it obstructs the interests of their own companies?"

"Even if the telecommunications cartel refuses to back down, the iPhone cannot be launched."

"Do you think that will happen? If it does, not only the U.S. but also its allies will stop importing Korean mobile phones and cars. Sales won't just be cut in half—they'll be slashed to a quarter."

This was the so-called secondary boycott.

A method also known as third-party sanctions, where the U.S. could pressure its allied countries to follow Super 301.

Other countries wouldn't dare attempt such a tactic, but the U.S. could easily make it happen.

"To press the telecommunications cartel further, we need public opinion on our side. I'll work with Hyundai to publish articles attacking the cartel."

"Also, provoke foreign mobile phone companies blocked by WIPI regulations. If they issue joint statements, the telecommunications cartel will have no choice but to yield."

I was essentially holding the Korean economy hostage to blackmail the telecommunications cartel.

If they tried to defeat me, the Korean economy would collapse.

It was a battle I couldn't lose. Why did they have to pick a fight with someone who was minding his own business?

The Presidential Chief of Staff visited Broadcasting Commission Chairman Kang Dae-gi.

Although both held ministerial ranks, Kang Dae-gi was the one bowing his head.

Despite their equal ranks, the Chief of Staff was the second most powerful figure in the administration—his voice represented the President's.

"How are you handling things that the U.S. is invoking Super 301? Stop the WIPI regulations immediately."

"WIPI is necessary to protect domestic companies and for customer convenience."

"Domestic companies? Be honest—it's only necessary for a few companies close to the Broadcasting Commission."

The Chief of Staff's voice was filled with anger.

While others were struggling to expedite Korea's early IMF graduation, an unexpected crisis had erupted, igniting his fury.