South Korea

Did an Apple 2.0 story touch a nerve at Samsung HQ?

April 21, 2013: 2:57 PM ET

A piece about Samsung's agent provocateurs seems to have stirred up a hornets nest

Screen Shot 2013-04-21 at 2.38.14 PMFORTUNE -- A funny thing happened on this site Sunday afternoon, Korea Standard Time.

On Saturday, following Samsung Taiwan's admission that it had paid anonymous posters to trash a competitor's products on Taiwanese social media sites, I posted a story about the growing suspicion among Apple (AAPL) investors that Samsung was engaged in a similar campaign against Apple -- and that it might be affecting the company's share price.

The post drew more that the usual number of comments. Twenty six hours later, we're up to 343 messages and counting. Some readers supported the thesis. Some ridiculed it. Some attacked Apple. Some attacked me.

That kind of thing comes with the territory, although not usually in such numbers or with such vehemence. But what happened at about 2 a.m. EST -- Sunday afternoon in Seoul, South Korea -- was new.

In the space of a few hours, more than a thousand votes were cast on the DISQUS feedback system, voting down any comment remotely anti-Samsung and voting up anything -- no matter how inane, in-artful or wrong -- that disparaged Apple, the thesis, or me.

For example:

betheball11: "Philip Elmer-DeWitt how much apple stock do you own?" (27 up votes)
Philip Elmer-DeWitt: "None. But thanks for asking." (22 down votes)

One of the posts that stirred up the most negative reaction overnight was a particularly thoughtful dispatch from South Korea itself, written by an ex-pat who calls himself Jake_in_Seoul.

Just to show that voices like his can't be silenced, I'm reposting it in full:

Thanks, PED, for writing on this important and complicated topic that people here in Korea speculate on privately. Many of the comments have been excellent, but here are a few nuances and personal perspectives that may be germane.

1. Samsung is a huge conglomerate, comprising somewhere around 80 individual companies involving everything from engineering, shipbuilding (2nd largest in the world), to hotel management, etc. with an even more complicated network of subsidiaries and joint ventures around the world. They own a major advertising agency and various large financial institutions (credit cards, insurance, securities). If they do choose to go into corporate warfare they have a wide range of expertise and global connections at hand to do so.

2. The Western press has been shamefully reluctant to pay close attention to even the normal details of Samsung's finances and functioning, compared to say, Apple, Google, and Microsoft, much less the extraordinary ones. Where is, for example, any in-depth discussion of the remarkable fact that Samsung Electronics has 3 "co-CEOs" or a good analysis of the longer-term implications of losing their largest customer? Korean analysts are likely too cowed by the possible threat of career suicide ever to write negatively of the company, reporters from Reuters, the WSJ, and FT, etc. only write puff pieces that raise doubt as to whether the material was drafted by Samsung PR. And worst of all, every press outlet on the planet keeps using (and treating as genuine) dodgy estimates of Samsung's mobile unit sales because the company refuses to release official numbers. Why should the supposed world leader keep its sales data secret?

3. I think it's fair to say that Samsung is not generally well liked by the Korean people, who are outraged, for example, at the high prices the company charges in local markets for their products ("we are all Samsung "patsies" Korean:호구, goes the frequent online lament). As brands go, I suspect LG is far more favored emotionally. And, while it's easy as outsiders to make Samsung into a mirror of Korea, I would urge caution. Do Wall Street institutions such as Goldman Sachs and CNBC really represent, for example, the essence of U.S? Sadly, in some manner, yes, but in the most important ways, I believe, no. So, too, Samsung. As an outsider who speaks Korean living here, I am continue to be amazed at the good people, extraordinary culture, and vibrant energy toward building a better future that I see here daily.
 It's a great place, generally, and using Samsung is a sad way to judge it.

4. Do I personally think that many at Samsung believe they are in in a global battle with Apple to gain respect for Korea and demonstrate to the "arrogant Americans" the superiority of Korean technology and business practice? Absolutely. It has the overtones at times of a holy war, especially after the jury verdict last August. And would this sense of righteous moral struggle lead the company to launch PR and financial attacks in order to enhance the company's prestige and honor? Very, very likely, in my opinion.

Thanks, Jake.

UPDATE: At the suggestion of several readers, I'd like to draw your attention to another worthy essay that was been hit with a lot of negative votes (165 and counting). It was submitted as a comment here by a Korean-American who posts under the tag alexkhan2000. As he explains, his handle is a portmanteau of two of his heroes: Alexander the Great and Genghis Khan.  Enjoy.

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