Smartphone Wars, Gangnam Style!

There is an incredible video on YouTube which shows South Korean pop star PSY performing his global viral hit Gangnam Style in front of a Seoul audience of 80,000 fans.  The entire audience pulses with the waving of arms in time to the music, which is itself barely audible over the noise of the crowd which, to a man, woman and child, appears to know every single word of the song.

To find a comparable achievement by an artist in the western world, you might have to go back to Queen's performance at the Live Aid convert in 1985, which was remarkable for the fact that, while the crowd of 72,000 was slightly smaller than PSY's, Freddie Mercury had them eating out of his hand despite the fact that they were not a dedicated Queen audience.

But if the PSY phenomenon demonstrates anything more broadly, it is that Apple should be afraid… very afraid!

So what has K-Pop got to do with smartphones, we hear you cry? We think quite a lot, as we shall explain.

WHO IS PSY?

Unlike Los Del Rio, the Spanish duo responsible for inflicting the Macerena on the world (over and over again – five of their six albums feature versions of the song), PSY is no one-hit wonder.  In South Korea he had six number one singles between 2001 and 2006, before his music career was interrupted by mandatory military service.  His comeback release in 2010 reached sixth position on the album charts, with two singles peaking at number four.  His latest album features Gangnam Style, which has already hit number one in Korea, Australia, Canada, New Zealand, Norway and the UK, and number two in the US, Switzerland and Ireland.

While the novelty of the song is certainly a major factor in its success, we suggest it would be wrong to dismiss it on this basis.  While PSY may or may not be able to repeat this particular global success, it is certain that we are going to see more Asian artists charting outside their native countries.  And while 'novelty' (as in 'novelty act') can be used as a pejorative, it is worth bearing in mind that in other contexts it is also the fundamental test of patentability, as well as being a common quality of what we would call 'innovation'.  Novelty is what happens when someone does something that has never been done before.

THE GROWTH OF KOREA’S CULTURAL INFLUENCE

The genre of music now known as K-Pop had its beginnings in the early 1990's in imitation and fusion of American popular music styles, and Japanese pop.  However, as is so often the case, imitation soon turned to innovation, with new styles of music and performance being created out of the fusion of imported styles, along with original contributions from Korean artists.

On the growing cultural influence of K-Pop, the current Wikipedia entry has this to say:

South Korea is emerging in the 21st century as a major exporter of popular culture. K-pop has been embraced by the South Korean government as a tool for soft power abroad, particularly towards youth. K-pop has come from humble beginnings to gain a huge fan base not just in Asia but also other parts of the world, and is considered by some to be South Korea’s greatest export because of its popularity and growing influence. As South Korea continues to develop its IT infrastructure, K-pop music is being shared over the internet and through mobile devices more rapidly than ever.

But it is not just about K-Pop. In an opinion piece appearing in The Age on Monday, 8 October 2012, political philosopher and columnist Tim Soutphommasane had this to say about Gangnam Style as part of a broader ‘hallyu’ cultural wave coming out of South Korea:

For many decades a notable exporting powerhouse in manufacturing, South Korea has become a significant cultural exporter in recent years. ''K-Pop'' music enjoys enormous popularity in Asia, as do Korean television dramas. The latter have even found a foothold in places such as Egypt, Iran, Turkey and Eastern Europe.

It isn't simply about culture, however. As Mark James Russell, the author of Pop Goes Korea, has noted in Foreign Policy magazine, South Korean governments have explicitly used pop culture to push more traditional exports. It is striking that ''a relatively small country with a language nobody else speaks could become so trendy so quickly, and convert the new image to economic power so effectively''.
 

As indicated in the Wikipedia excerpt, the current term for this kind of cultural influence is ‘soft power’ (although the less flattering ‘cultural imperialism’ is still commonly used when the cultural exports are from a country which already enjoys a dominant power position).  Soft power is about getting others to want the same outcomes you want without directly imposing your will upon them.  Soft power co-opts people rather than coerces them.

SAMSUNG’S ‘SOFT POWER’

Samsung’s global disputes with Apple are, on one level, about legal and commercial issues – who infringed whose patents, and what are the consequences of this.  But at a more pervasive level they are part of the Korean company's global strategy to develop its public image and cultural cachet.  The battles are not just taking place in the courts, they are playing out in the media which, as we know, actually cares less for the legal details and more for the fact that disputes between big companies which make familiar, everyday products, will bring eyeballs to stories.  And the comments on those stories, in social media, and elsewhere, tell us that many people care enough about these products, these companies, and these brands, to take sides in the dispute, regardless of the legalities.

So even when Samsung loses in court, it continues, slowly, to win hearts and minds, co-opting people to its brand.

The fact is that Apple’s i-devices outsell Samsung's Galaxy products in the US not because they are technically superior, but because they are more ‘cool’ (we know this to be true, because a UK judge said so).

In engineering and technology terms, Apple and Samsung are evenly matched.  Clearly Samsung will not ‘beat’ Apple by technical superiority, and Apple’s current edge derives not from technology, but from its exemplary design elegance and brilliant brand positioning.  Apple products have a place within the culture that will not easily be usurped.  For many iPhone and iPad users, these devices are not just something they use, they are a fashion choice, a sign of identity – a statement about who they are.  Making people feel that way has been part of Apple’s genius.

The question, then, is how a company like Samsung can come to occupy a similar place in the lives of consumers.  To some extent, this will be about the company building a form of ‘cultural confidence’.  While imitation may be a good strategy for catching up with a leading competitor, it does not offer the kind of unique brand identity that enables a company to stand out from the crowd, differentiate itself from the competition, and appeal to the hearts of consumers, as well as their minds.

Win or lose in the short term, Samsung’s strategy makes sense.  By going head-to-head with Apple – on the US company’s home turf as well as in Asia – Samsung demands to be taken seriously.  For its part, Apple’s legal aggression sends the message that it sees Samsung as a threat.  And when the world’s most valuable technology company does that, it can only add to the reputation of the target.

FROM IMITATION TO INNOVATION

There is no question that Samsung has been an imitator in the past.  This pattern has been repeated again and again in Asian economies – first Japan, then South Korea, now China, next (we speculate) Viet Nam – whole industries bootstrap themselves by imitating established models, before eventually gaining the capability and confidence to become innovators in their own right, and strike out in new directions.  Just think about the automotive industry – in the 70’s Japanese cars were derided in the west, while in the 90’s it was Korean cars, yet today Honda, Nissan and even Hyundai are respected brands selling desirable vehicles with a reputation for quality and reliability.  The Chinese will be next.

There is no reason to believe that the same pattern will not be followed in the mobile technology sector.  Our guess is that Samsung is dug in for the long haul.  It is hard to tell whether it actually has a long term plan (yet), but it is telling that Samsung has clearly made a decision to fight, rather than to retreat back to the relative safety of its Asian markets.

COMPETITION IN ‘THE ASIAN CENTURY’

Who would have imagined, at the height of Britney Spears’ success, that she would one day appear on US TV with a Korean pop star, whose songs are not even in English, and that he would be the ‘cool’ one?!

So while, today, if you set an Apple iPhone 5 in front of American consumers side-by-side with a Samsung Galaxy S III, the Apple device has the edge in ‘cool’, there is no reason to think this will always be the case.  Samsung will surely gain in confidence, and find its own identity.  And it will not look like Apple, any more than PSY looks, sounds – or dances – like Michael Jackson.

And it is not just Samsung, and not just Korea, that the established western companies need to be worrying about.  Asian manufacturers already dominate Asian markets, and show no sign of losing ground on their home turf.  Right now, Samsung appears to be Apple's only serious competition in the US smartphone market.  Elsewhere, however, other Asian manufacturers, such as Taiwan's HTC and China's ZTE, are also competitive. These companies are making plenty of sales, and they are not going anywhere.

Apple's position in the US is, in some ways, unenviable. As a market leader, the only direction it can go is down.  And the Asian tigers are snapping at its heels.  Who knows whether Samsung's next product might not be the Gangnam Style of smartphones.

We think we have seen the future, and it does not (predominantly) speak English. Nor does it begin with an 'i'.  Some will choose to fear this future.  We think it could be quite exciting!

Tags: Apple-v-Samsung, Innovation, Smartphone wars, Strategy, The Asian Century