The Korea Times: Samsung boosts China activity

Samsung Electronics has become more aggressive about strengthening its presence in China, broadening its partnership with local companies and tightening its relationship with local government officials in order to land big projects.

Industry insiders believe that the company’s increased activity in the Middle Kingdom has much to do with its souring relationship with Apple, which has been throwing lawsuits back and forth with its Korean rival over the past year.

Samsung officials say there is a “broad consensus’’ in the company’s upper-management that it must make more noise in China. The company clearly wants to cement itself as a brand in China, one of the fastest growing markets for mobile Internet devices such as smartphones and tablets.

China is a market where Samsung desperately wants to have Apple under its feet, not only in terms of sales, but also according to its reputation as a job creator, said one Samsung official.

“As you know, we have been very aggressive in facility investment and have been holding high-profile business meetings with Chinese companies and policymakers. Yes, we want to be bigger in China than Apple,’’ he said.

Of course, that won’t be an easy task when China is Apple’s second-largest market after the United States. While Samsung and Apple, which accuses its Korean rival for copying the look and feel of its revolutionary iPhones and iPads, have more than 10 lawsuits in 10 different countries between them, the legal dispute has yet to reach Chinese shores.

Another Samsung executive said that if the company strengthens its position in China it will also help it guard against this possibility should Apple decide to bring the intellectual property dispute to the country.

“Our activities in China aren’t all about Apple. But yes, of course we want to be better positioned should the legal dispute hit China,’’ he said.

There is the possibility that Samsung could sue Apple in a Chinese court over infringement of Samsung-owned long-term evolution (LTE) mobile patents used in its devices. A Samsung spokesman declined to comment on the issue.

Data from IHS iSuppli showed that Apple’s smartphone market share in China for the first six months of this year was 7.5 percent, making it the seventh-largest vendor. Samsung was top with a 21 percent share during the same period. China is now believed to be the world’s largest smartphone market.

Samsung has been building its first overseas flash memory plant in the western Chinese city of Xian and a display factory in the southern part of the country.

The chip plant in Xian is a $7 billion investment from Samsung, which company officials say is the biggest single-project investment ever for a foreign company in China.

Samsung China President Chang Won-kie vowed to boost investments in local finance, construction, medical equipment and personal technology. Samsung China eventually targets $100 billion in annual revenue, a significant rise from the current $60 billion.

Samsung’s increased investment has been noticed by Chinese policymakers. Chinese Vice Premier Li Keqiang sent a congratulatory message marking the groundbreaking ceremony for Samsung’s Xian factory. This is the first time that a top level Chinese government official has sent a letter to a foreign company, according to Samsung officials.

More recently, Hutchison Whampoa owner Li Ka-shing had his first meeting with Samsung Chairman Lee Kun-hee for the first time to discuss ways of deepening ties, especially over handsets and networks.

The talks attracted a lot of attention because Samsung will help the Hutchison build LTE networks. The Hutchison owner Li had maintained favorable business partnership with Apple.

But Apple’s “excessive’’ request in pricing, which is no news at all, has resulted in business deterioration for the firms.

The meeting was attended by Samsung corporate strategy chief Choi Gee-sung and Lee Jay-yong, the chief operating officer at Samsung Electronics and a son of chairman Lee.

“Samsung is gaining trust and support from China. We are more than positive that will help us get lead over Apple in next patent disputes in China,’’ said another Samsung official.

“The lop-sided Apple victory significantly hit Samsung. China is the last-card for Samsung to keep the current top position as the biggest smartphone manufacturer in this planet. Samsung is more supported in China than Apple,’’ said the official.


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