Behind Samsung's push to rule the world

Samsung wants to be all things to all people. CNET's Shara Tibken went to South Korea to discover how it does just that.

A display in Samsung's phone museum in Gumi, South Korea, shows every mobile device the company has made over the years. It builds dozens of models annually but now focuses its line around its Galaxy Android smartphones.

(Credit: Shara Tibken/CNET)
Editors' note: Be sure to catch the other stories in this package: on the many pieces of Samsung Group's empire, on road-testing Samsung's S Translate app, on TVs and appliances in a Q&A with co-CEO Boo-keun Yoon, and on how Samsung torture-tests its products.

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SEOUL, South Korea -- "It sounded like a toilet." Samsung Electronics sound designer Myoung-woo Nam is describing the not-quite-right noise his team created for the Galaxy S3, at least initially. Here, in a dimly lit room on the eighth floor of a Samsung skyscraper, in the heart of Seoul's trendy Gangnam district -- yes, that Gangnam -- a team of audio designers create sounds to capture what they describe as the overall theme of the device, whether it's for a Galaxy phone or the just released Samsung Galaxy Gear.

Each has its own challenge. Some sounds require a 40-piece orchestra; others come about using household items such as straws and drinking glasses, which ultimately solved the toilet problem. But more on that in a moment.

For its follow-up phone, the Galaxy S4, the team wanted to create "the sound of light." It used synthesizers, and then, as it always does, tailored tones for different parts of the world. After all, what's pleasing in one country might offend in another -- as Samsung discovered when Japanese women thought a whistle it considered using for messaging on the Galaxy S4 sounded like a catcall.

The takeaway? Details matter. A lot. As Sujin Park, a senior member of Samsung's design strategy team, put it to me, "Localizing is our strategy."

It's a strategy that, over the past few years, has helped Samsung soar to the top of the smartphone world. Unlike its fierce Cupertino, Calif., rival, Samsung wants to be everything for everyone. A bigger screen? You can get it from Samsung. A stylus? Sure. Want a flip phone? No problem.
This is the Samsung Way: Do it all, and do it fast. Really fast, even if you're following the market Apple created and sometimes, as a jury determined, stealing its ideas. In the year it takes Apple to release a new iPhone, Samsung typically unveils three or four "flagship" products, adding up to several dozens in all. That speed, coupled with its fierce commitment to quality and marketing heft, has lifted this sprawling South Korean empire from niche player status in just half a decade.

Now, Samsung has added something else to its playbook: Do it first. The Galaxy Gear, its big push into wearable tech, came out while the pundits were still guessing about what Apple might do. And in early October, Samsung introduced the Galaxy Round, a smartphone with a curved display bent at the vertical axis. The Gear is off to a slow start, to put it kindly, and who knows if people will care about the Round's quasi-tubular look. But to the top brass at Samsung, it almost doesn't matter.

Young-hee Lee, head of global marketing for Samsung's mobile division (left), and designer Zac Posen display the Samsung Galaxy Note 10.1 in New York on Aug. 15, 2012.

(Credit: AFP/Getty Images)

"The idea is to be the fastest company," said Young-hee Lee, who heads marketing for Samsung's mobile business and, since joining from L'Oreal in 2007, has helped make the brand recognizable the world over. "React is not the proper word anymore. We should lead."
Seeking world domination

One way Samsung is trying to do that is through sheer heft. The company employs an army of 62,000 engineers, just short of the entire population of Palo Alto, Calif., and it markets their efforts like few others.

This year, Samsung -- which generated $210 billion in revenue over the past four quarters, roughly $40 billion more than Apple -- is on track to spend more than half a billion dollars on advertising in the US alone. That's about what Apple spends, but more than Nokia, HTC, and BlackBerry -- which made its big comeback push earlier this year -- combined, according to market research firm Kantar Group.

 

"The idea is to be the fastest company. React is not the proper word anymore. We should lead."
--Young-hee Lee, Samsung executive vice president and head of marketing for mobile

In part, Samsung is trying to combat the free attention Apple gets from its cult-like following -- a phenomenon that drives people inside Samsung nuts. For the latest iPhone launch, spies from Samsung's parent company visited a New York Apple store to try to understand just why so many people line up for hours, even days, in advance.
And on the day Apple unveiled the iPhone 5, just more than a year ago, a team of Samsung execs watched the event from a Wolfgang Puck restaurant in Los Angeles, turning it into a sort of war room. By the time Apple CEO Tim Cook wrapped up his presentation, according to Fortune magazine, the Samsung gang had drafted the beginnings of an ad campaign against Apple. When the iPhone 5 hit the market a week later, Samsung launched a TV spot mocking Apple fanboys.
Marketing only gets you so far, of course. You need great products, fierce R&D, and a manufacturing process that's fast and efficient -- all of which Samsung has developed through an approach that's uniquely Samsung: It does almost everything -- from building the parts to assembling the devices -- in house. That's made this sprawling enterprise surprisingly nimble.

"It all comes down to execution," says Mark Newman, an analyst with Sanford Bernstein who worked in business strategy at Samsung between 2004 and 2010. "Nobody else has been able to do this."