Samsung Electronics is a company at the top of its game, having become the world’s leading smartphone manufacturer in the last year.
But as any business guru would be quick to note, now would be a dangerous time for the South Korean giant to be content. With Apple attempting to ban some U.S. imports of Samsung’s phones and tablets in response to patent feuds, the company is also keen to shed its image as a follower, rather than an innovator, in the field of consumer technology.
Samsung is doubling down on technology investments in its competitor’s backyard, including two new R&D buildings in Silicon Valley that will house 2,000 staff and a recently announced startup accelerator.
Leading this effort is Young Sohn, who started at Samsung in August as president and chief strategy officer. He has spent a long career leading several successful Silicon Valley semiconductor and storage companies after founding Intel’s PC chipset business and running its joint venture with Samsung in the 1980s. MIT Technology Review business editor Jessica Leber sat down with Sohn in his office in Menlo Park, California, to talk about his new mandate.
Tell me about your new role at Samsung.
I’m responsible for driving strategy and innovation globally. My job is to work with our team in the U.S. and Korea, including the CTO and M&A office, to identify new technologies and markets around the world.
This is an important priority, which is why Samsung decided to assign a president-level role to lead this effort outside of Korea. Titles are a big deal in Korean companies, so it’s unique to have someone at this level based here.
How is Samsung going to change?
Samsung was founded in 1938 and has a long history of successful business transformation. Today, Samsung Electronics is the largest IT company in the world. But Samsung doesn’t want to be complacent. To get to the next stage of growth, the innovation engine is critical. You need to have the right people. You cannot just optimize talent in Korea—you have to optimize talent overseas, and being close to critical innovation centers like Silicon Valley is important to us.
Our presence in Silicon Valley was initially to support our customers. We have grown with eight different labs already, and several thousand people are working in the U.S. for Samsung today.
We’re saying, look, the center of innovation is here, and we want to make our organization twist around the other way. We’re going to be much closer to Silicon Valley, and places like Austin, Boston, Israel, and Russia and other talent centers around the world.
Your most high-profile competition is with Apple, based here in Cupertino. How much does that drive this strategy?
We see Apple as a very innovative company. They are a customer of ours, and they are a competitor of ours. But there are 6,000 startups here. When you look at where venture capital dollars are spent, more than half are spent right here, globally. That’s what makes this area really interesting for us.
What technologies will you be focusing on?
Samsung has always been known as a device company, a semiconductor company, a display company, and now a mobile-phone company. We make really great devices, but actually if you think of our future, it’s in answering the question of how we put it all together and how we manage the data that’s coming out of these devices and encourage the innovation ecosystem for our platforms.
If you go around and talk to venture capitalists here, they’ll say the areas of growth are in cloud technologies, big-data technologies, mobile-ecosystem technologies, and enterprise infrastructure. These are all very critical things we’ll be looking at.
Can you say more about why these technology categories are so important?
OK, so think about Apple compared to Samsung. I use a Mac, actually, at home. I’ve always used Mac, an iPhone, and an iPad. I also have the Galaxy. So I’m a great example.
If you look at the strengths of Apple, in a way it’s not the product per se. It’s that consumers like their ecosystem such as iCloud. I like that my family 6,000 miles away in Korea is able to see my schedule and see all of my contacts and photos. It is sticky, but it is a proprietary architecture.
Look at your phone [pointing to my Samsung Galaxy Nexus]. It’s a better phone, in my view. It’s a better display. It’s faster. But eventually the connected ecosystem is really critical.
I think we have probably the largest platform in the world between the devices and displays and televisions we sell. We actually provide more devices that are interacting with consumers than anyone in the world. But if you think about our experiences, it’s device-centric. It’s experienced by itself. It’s not experienced in a connected way. So we think we can provide a lot more things than what we are doing today with an open ecosystem with our partners.
Wait, you are still using Apple products?
At work I’m using Samsung devices; Apple at home, mainly because all of my systems and files are done that way. That’s sticky, you know? However, I did figure out how to sync all of my contacts and all of my schedules between the two different systems. You can do it. It’s a bit of work, but it is possible.
Is there the worry of another company one day overtaking Samsung, just as Samsung overtook Apple in smartphone sales?
At Intel, when I was working there, Andy Grove told us, “Only the paranoid survive.” Samsung has that same philosophy. We’re highly paranoid. You are only as good as your latest product, and so we’ll continue the push for innovation and talent that can put us in a new place. And we will continue into new businesses. For example, we have announced we are going to go into the health-care space. You will see us investing there and trying to figure out how to support better living though better health. There’s an aging population that requires better care, and that’s a big market.
What’s on your upcoming agenda?
I think we are probably going to have some sort of Samsung communications day to articulate our vision and how we work with innovators. We are increasing our R&D and investments to encourage entrepreneurs and partners to build and to support the Samsung platform and ecosystem. A lot of people don’t know the company that well here.
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