Samsung: Apple’s chief frenemy is rudderless again

From the Wall Street Journal’s “Samsung Is Without a Leader as Jay Y. Lee Returns to Prison” ($) posted Monday:

Samsung’s de facto leader, Lee Jae-yong, returned to prison, throwing the South Korean conglomerate into disarray during a generational transfer of power as the Covid-19 pandemic revamps key industries.

Mr. Lee, the 52-year-old grandson of Samsung’s founder, received a 30-month prison sentence from a South Korean appeals court on Monday, in a retrial of his 2017 conviction for bribing South Korea’s former president. His prior time behind bars of roughly a year counts toward his new sentence. If granted early parole, Mr. Lee could walk free next year…

The Samsung conglomerate encompasses dozens of businesses—each with CEOs running day-to-day operations—but major decisions require Mr. Lee’s approval. In a sign of his vast influence, Mr. Lee’s detainment triggered a selloff across Samsung’s affiliates, wiping away billions of dollars in market value. Samsung Electronics fell 3.4%, battery makerSamsung SDI Co. slid 4.2% and Samsung C&T Corp. , the conglomerate’s de facto holding company, dropped 6.8%.

“They’ve lost their captain,” said Mike Cho, a South Korean business expert at Korea University in Seoul. “All the power is centered around one person.”

My take: Ethical corporate leadership has its benefits.


  1. Bart Yee said:
    “ Ethical corporate leadership has its benefits.” Exactly!! For all the fingers pointed at Apple, they never had corruption leveled at them. The Lee family has been convicted multiple times and “pardoned” (sound familiar?) by cozy corrupt presidents and administrations, partly because of cultural and power / national pride issues. But the S. Korean populace is fed up with the chaebol system and its mistreatment of workers and whole classes of people.

    Jay Lee also faces yet another trial for corruption behind the actual mergers of two holding companies from the above corruption scandal that solidified his family’s control of Samsung and tried to save them some of the inheritance tax. Ironically, every time Samsung’s stock went higher, their inheritance tax went up until their father died recently – triggering the taxes to the tune of ~$10B on Dec. 22, 2020. Jay will attend the trial while in prison.

    January 18, 2021
  2. Bart Yee said:
    As for Samsung, their corporate structure has multiple CEO managers of each division and sub-division. They change or rotate them about every two years. They might have some strategic roadmaps in Semiconductor / VLSI and Mobile but it remains to be seen if multiple small rudders is even close to effective. I’m sure Lee will get to have communication with Samsung but that will be limited. He does have 3 sisters though so who knows if they will vie for any power during his incarceration?

    This is potentially an opportunity for other Android makers but the bigger ones are also under fire in major markets – Huawei, now Xiaomi, and soon maybe even Google itself.

    As for Apple, trying to do the right thing, ethically, morally, and business wise provides good guidance to the board and management. Apple will not “take advantage of this” but will continue to pilot its own starship, far above the turbulent seas below. Apple’s results will be of their own making, not the faltering of its “competition”.

    January 18, 2021
  3. Gregg Thurman said:
    Not surprising coming from a Company that routinely steals IP, then aggressively defends subsequent lawsuits until they exhaust plaintiffs.

    January 18, 2021
  4. Steven Philips said:
    How much of this will actually be heard in the media? vs. all the little issues that get magnified for Apple?

    January 18, 2021
    • Bart Yee said:
      Good point! Other than S. Korean news outlets and the impact this has for Korean society, its just another 1-2 day news story that will fade in Western media. I’ll be scanning the various Android / Samsung centric tech sites to see how they react. I suspect Sammy fanboys will say its really no big deal, either they like the products or they don’t and pretty much don’t care if there’s major corruption in the owners or management. “I can just switch over to a different (Chinese) Android maker anyway” is a common refrain.

      Of course, any tired old tropes (8-10 year old reports of labor problems, reliance on current Chinese assembly via contractors) are popped up whenever Apple does something badly or virtuously.

      January 18, 2021
  5. Michael Goldfeder said:
    @Bart: Or a headline will incorporate “Apple” merely because some other company who might have done some tangential work for Apple long ago now announced a recent partnership or joint venture with some unrelated outfit for a business having nothing at all to do with Apple, but the headline is; “Apple assembler X reaches an agreement with…..”

    January 18, 2021

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