Apple Watch vs Samsung | From Dust to Dynasty | 1

0:09It's May 28, 2014 in San Francisco. Samsung's VP of Digital Health, Ram Fish, paces the stage of the San Francisco Jazz Center. He's dressed in Silicon Valley casual, a dark sweater and khakis. Images depicting sensor technology and athletes' bulging muscles flash on a giant screen behind him. He stops center stage and begins his pitch. At Samsung, we believe in bold ideas. We care deeply about wearables. And we love sensors. The Korean Electronics Megacorporation already has two smartwatches on the market, both little more than glorified step counters. Fish is here to reveal their latest innovation.

0:50He opens a black box on the podium and takes out a square watch case in one hand and a rubber wristband in the other. Introducing Simban, a modular platform for wearable health sensors more advanced than any others on the market. Anybody interested in a live demo? Fish puts on the SIM band and holds his wrist below an overhead projector. The SIM band on his wrist appears on the huge screen. Fish taps the watch, and the digital time display switches to a screen of biometric readings. Inside this ultra-slim watch are some serious smarts. My key health signs are tracked continuously. What do we mean by continuously?

1:33Look. Fish swipes from right to left on the watch, and a new screen shows what appears to be a live ECG display, like what you'd see in a hospital. You can see my finger on the clasp. While I'm touching it, my heart rate, blood pressure, and temperature are calculated and displayed. A journalist in the front row leans forward in his chair to get a better look at the wave patterns and numbers on the screen. Fish glances nervously at him, but soldiers on with his presentation. Consumers will be able to share high-quality sensor data with their doctor via our proprietary Samsung cloud. This is Simband.

2:11Thank you. To cap off the event, Samsung's president calls Simband an investigational device and makes a pitch for developers to partner with Samsung on the new technology. Then he walks off stage without taking questions from the press. The tech writer in the front row turns to a blogger next to him. What the hell was that? Did you notice Fish's pulse rate stayed exactly the same the whole time? That's just not normal. I think the live stream was a fake. And what on earth is an investigational device? The blogger smirks. I bet you a hundred bucks we won't see a single sim banned in stores ever.

2:53They just can't stand the thought that Apple will beat them to the market with an honest-to-God smartwatch that can measure your blood pressure. They're both half-right. Just as the journalists suspected, as Phish demoed the SIM band, coders were working frantically behind the scenes to correct the faulty, wildly fluctuating and intermittent sensor readings showing up on the screen in real time. Samsung is running scared. After decades of being a fast follower of other more innovative consumer electronics companies, they've finally beaten Apple to the punch with the Galaxy Gear and the Gear 2, but Apple's long-awaited first smartwatch is rumored to be an advanced clinical-grade health-wearable.

3:35So, in a panic, Samsung threw together the Simband project. But they've only managed to build a single wonky prototype ahead of Apple's launch, which is only two weeks away. If Samsung can somehow fast-track a viable Simband, they'll torpedo Apple's first new product since the death of Steve Jobs. But if they don't make good on the promises of this investigational product, then Apple's new Miracle Watch will steal their brief reign at the top of the brave new world of wearables. It will destroy their chances of ever being more than a Me Too company, churning out copycat devices already perfected by the American geniuses of Silicon Valley.

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6:26From Wondery, I'm David Brown, and this is Business Wars.

6:57In our new series, we trace the path of two of the world's largest and most well-known consumer electronics companies as they battle for dominance over the fledgling smartwatch industry. Right now, more than 37 million Americans wear some kind of connected smart device on their wrist to do everything from monitor their blood oxygen levels to answer a call while paddleboarding. The global market for smartwatches is worth$45 billion annually. In 2023, Apple dominated the crowded sector with a 26 % share, while Samsung hovered in second place with just 9%. But to understand how remarkable it is that Samsung is even in the running at all, we have to go back a long way to a small, dusty town in Korea in the early decades of the 20th century, where a dissolute young man finally hit his lowest point.

7:52This is Episode 1, From Dust to Dynasty.

8:03It's spring 1936 in the rural city of Daegu, a dusty Japanese trading hub in southeastern Korea. 26-year-old Lee Byung-chul pushes his chair away from the gaming table in a dirt-floored gambling parlor. He's a short, thin man with round tortoiseshell glasses that give him a scholarly look. Smoke hangs in the air over the pile of bills and scattered ivory dominoes from the last hand. Lee leans over and stubs out his cigarette in an ashtray next to his discarded tiles. That's it for me tonight, gentlemen. I'm cleaned out. A man on the other side of the table slides the cash toward him. As if you ever lack for anything.

8:42The son of the mighty Lee family. You probably have more than this lost in your sofa cushions. But fine, take off. I'll just win more off of you tomorrow. Lee ignores him. Lee's father is a well-off landlord. People have always picked on him for being a rich kid. Lee leaves the gambling parlor and trudges home. He stares at the ground as he walks. He's been depressed ever since he fell ill with pneumonia and had to leave university in Tokyo without getting his degree. Now, he works as his father's second-in-command every day and gambles every night. Hey, you. Why are you out so late? Lee raises his head and locks eyes with the Japanese policeman.

9:24Korea has been under Japanese occupation almost since Lee was born. He's used to constant harassment by the military police, and he knows he has to answer in Japanese or suffer the consequences. I couldn't sleep, officer. I'm headed straight home now. The cop bounces a leather-clad nightstick menacingly on his palm. Lee can feel his hostile gaze like a hot iron on his back as he walks past. His father is a secret funder of the independence movement against Japan. Lee has to keep a low profile, or he'll hurt the cause. Lee enters his traditional house with its curved wooden roof. He stands in the doorway of the room shared by his three children.

10:07Moonlight streams in the window onto their faces as they sleep. He fears that they'll grow up thinking of him as weak, a feckless man who numbly followed in his father's footsteps and submitted to the indignity of the Japanese occupying force. But tonight, the moonlight plays tricks on his mind. He feels as if he's waking up from a long dream. If he doesn't set a goal in life now, he never will. He vows to show his father he's his own man and to prove to the Japanese that Koreans can do anything the Japanese can do and do it better. In the following weeks, Lee establishes a rice mill in Masan, a settlement west of town.

10:51But in the chaos leading up to World War II, his business fails in less than a year. Determined to try again, he takes a long trip through China and Korea to meet with traders. And it's on this trip that he discovers a business opportunity. He realizes that the Japanese are using Northeast China as the industrial base for their war effort and will need suppliers of vegetables and dried fish, commodities he can find readily in the Korean countryside. In 1938, he borrows money from his father and sets up a small produce, fish, and noodle store in Daegu. He names his import-export business Samsung Sangho, or Three Stars Shop in English.

11:37It means to be big, strong, and eternal like the stars. It's also inspired by the thriving Japanese industrial company Mitsubishi, whose name means three diamonds. But Lee is almost 30 years old. If he doesn't succeed with this food business, his moonlit epiphany will amount to nothing more than an empty dream.

12:05It's June 25, 1950, in Seoul, South Korea. Lee, his wife, and their eight children huddle together in the living room of their three-story house downtown. Lee peeks from behind the drawn curtains and sees a long line of trucks racing through the city, filled with soldiers. They're headed north to defend Seoul from the invading North Korean communist forces that crossed the 38th parallel early that morning. Lee's youngest child is only seven, and she's frightened by the noise. His wife pulls their daughter close. Don't worry, little one. Listen to how the people are cheering on our brave soldiers.

12:42Byung-chul, tell the children they have nothing to fear here in Seoul. Lee nods, but his furrowed brow tells a different story. He's now a local tycoon. He used family money and connections with the Japanese and Americans during the war to buy a brewery, a local university, and a newspaper. His small grocery concern is now a nationwide business. He knows that if the communists reach Seoul, the first civilians they'll target are prosperous capitalists like him. Lee pats his daughter on the head, but his hand trembles. We'll be fine. The fighting's far away. By morning, it will all be over. Lee spends a tense night guarding over his family, waiting for news.

13:28At dawn, Lee rushes to the window and sees a tank rolling past. The North Korean flag flies on its turret. The enemy has taken Seoul. The communist forces terrorize the city for four agonizing days. They round up the heads of the wealthiest families, accuse them of collaborating with the Japanese and the Americans, and try them before people's courts in the town squares. All are found guilty. Firing squads execute men on the spot. On the fourth day, the soldiers arrive at their doorstep. Lee opens the door and the soldiers rush into the house to search for loot. The squadron leader walks into the living room and sits down in a velvet armchair.

14:13He gestures to Lee to take a seat across from him on the couch. Lee Byung-chul, you are accused of capitalist profiteering and collusion with our Japanese colonizers and the American enemy. Your riches rightfully belong to the people and your North Korean victors. Do you have anything to say in your defense? Lee tries to maintain calm. I am a patriot and my assets belong to you and to the people of Korea. You'll find everything I own at the Samsung warehouse on the south end of town. Looters are probably already there, but I have a safe there too. Here's the combination. Lee reaches into his pocket and hands the man a piece of paper.

14:51The North Korean leader and soldiers run to their tanks. Lee's wife sinks back into the sofa. She weeps with relief that the soldiers' greed probably saved them. Three months later, United Nations forces recapture Seoul, but the city is in ruins, and the North Koreans are planning a second surge. Lee and his family join a flood of refugees on their way south. They settle in the country's southernmost port town of Busan. Lee is determined to rebuild. But resources and talent are scarce in wartime. Somehow, he must turn untrained laborers into a workforce that will reestablish his empire out of thin air.

15:33If he can't, Samsung will be lost to history. Just another casualty of one of the deadliest civil wars of the 20th century.

15:45After the Korean War ends, Lee cultivates close political ties with South Korea's first president. His influence enables him to import raw materials like wool and export it as cheap clothing. With the profits, he buys an insurance company, a sugar refinery, a chemicals company, a bank, and sets up a wool spinning plant. And to keep appliance prices low, he also buys multiple factories to produce parts. Koreans call Lee Mr. All-Wool for his luxurious wool coats and the man with the golden touch. But he's also considered a corrupt mogul in bed with the government.

16:32It's a frigid February morning, 1983, in Yeongin, Korea, some 35 miles southeast of Seoul. A hundred young Samsung semiconductor engineers line up in formation at the foot of a mountain range outside the city limits. Many wear camouflage uniforms from their military training. A Samsung manager marches to the front of the ranks and turns to face them. Engineers, Chairman Li has promised the nation that Samsung will deliver a 64K DRAM chipset this year. As of today, we will begin training to become mentally and physically tough enough to meet our deadline. You will hike 64 kilometers through the mountains all day and through the night.

17:12You are Samsung men, and you will succeed. The manager raises his arm and points toward the trailhead. Engineers, forward, march. The engineers break ranks and jog up the path. No one wants to appear to be shirking. Chairman Li has just published a full-page announcement in the country's leading newspaper. It outlines the corporation's pivot from mass exporter of cheap household appliances to global leader in the burgeoning semiconductor industry. But a global recession and rising trade protections now threaten Samsung's export business model. Lee's decided the company's future lies in electronics.

17:53And he's molding the ideal workforce to achieve this goal. He calls them Samsung men. The engineers pace through the freezing day and into the night. At two in the morning, a unit commander jumps out from behind a boulder onto the trail and ambushes them. Engineers, prove that you can think under pressure. Find a living thing and bring it to me. The men stare at him in disbelief. The winter forest is barren of life. They scatter, searching for a blade of grass, anything. But one engineer pulls a lunchbox out of his pack. He finds a dried anchovy, a common Korean snack, and puts it in the cup of his thermos.

18:34He fills the cup with water and hands it to the commander. Sir, it was alive a moment ago when I caught it. The commander swirls the cup in his hand. The point of the test was to come up with a creative solution. And this is certainly out-of-the-box thinking. Ha ha ha! All right, you pass. Good work. The engineers undergo tests and challenges until dawn. At 7 a.m., they shower and clock in at the company's brand-new fabrication plant. Then, with no sleep, they work until 11 that night. This is the fiercely loyal, diligent, and militaristic corporate structure that Chairman Lee has cultivated to help him survive civil war, a 1961 military coup, and a family bribery scandal that sent one of his sons to prison.

19:21The doggedness of the Samsung employees has financed a house in Seoul for Lee's eight children and 20 grandchildren, a palatial estate in the countryside where peacocks strut about, as well as a second home, a second wife, and a second family in Tokyo. The Samsung men are already producing low-priced televisions and kitchen appliances, but Chairman Lee is now in his 70s and facing lung cancer. He has toured the semiconductor lines of Hyundai, IBM, GE, and Hewlett-Packard, and he knows Samsung is years behind. If the Samsung men don't overtake these rivals soon, then the company that guarantees its workers a job for life and boasts a name trumpeting immortality will die with Lee's last breath.

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21:55November 1983 in Suan, South Korea, an industrial suburb 30 miles south of Seoul. 28-year-old Steve Jobs emerges from a taxi in front of the Samsung Electronics headquarters. Apple Computer's young CEO is in Asia on a quest to find suppliers for his new passion project, the DynaBook. Samsung employees await his arrival in front of the building. They bow in greeting. According to strict Korean etiquette, the oldest and highest ranking among them steps forward and greets Jobs. Welcome, Mr. Jobs. It's an honor to meet you. Allow me to escort you to Chairman Lee. Jobs wears his usual business casual outfit.

22:35A white button-down shirt, gray vest, and Birkenstocks. He's a multimillionaire after Apple's IPO in 1980, and he sees no reason to obey Korean customs like wearing formal clothes to show respect. Hi, great. Let's get to it. And can we forget the tea-drinking stuff? I've got a plane to catch tonight. Jobs strides to the entrance. Chairman Lee and his deputies meet Jobs in the lobby. Welcome, Mr. Jobs. I understand you need a supplier of memory and displays for your new product. You have come to the right place. Lee and his entourage lead Jobs to a conference room with regal red upholstered armchairs and antique furnishings.

23:12Lee begins by unveiling his vision. Mr. Jobs, I intend to build Samsung into the world's leading supplier of computer chips. We are in the midst of the personal computer revolution led by Apple and IBM. Samsung will join you in the forefront of this new technology. It will raise our global status even further and bring honor to our country. Jobs cocks his head and grins. Samsung is a giant in South Korea, but Americans know it as a provincial family business that makes shoddy microwaves for GE. Western expats call it Samsung. But Jobs likes Samsung's ambition and thinks it shows promise. He wags his finger at Lee.

23:54I know all about what you guys at Samsung want, and I also know you're just starting out making memory chips and had to go to those Neanderthals at Micron in Idaho for training in tech. What I need to know is, do you share my vision? Next year I'm going to launch the Macintosh, the most revolutionary personal computer ever made. It'll change how people live. Jobs is excited. He paces from one end of the large room to the other. He tosses his head to shake his long hair out of his eyes. But the DynaBook is really cool. Imagine a computer as small and as portable as a paperback. Sure, some people in my own company say it's science fiction.

24:33It's too niche and expensive to build, but they're idiots. Handheld electronics are the way of the future. I want to make something you can put in your jeans pocket that will hold every book in the world. And if you convince me you understand that too, then we might be able to do business. The Samsung men can't believe this hippie from California. He points at people. He walks around instead of sitting quietly with dignity. He talks when he should be silent, as befits the youngest in the room. They think Chairman Lee must be appalled. But their soft-spoken elderly leader, who loves Confucian philosophy, traditional pottery, and calligraphy, sits quietly as Jobs natters on about himself and his dreams.

25:17After Jobs leaves, Lee assembles his team around the conference table. He pours the tea they never served and sums up his impressions of their boastful, mercurial guest. He talked a lot, but much of what he said is true. I believe he is the genius who can stand up to IBM. We must push to make microchips for the future he foresees. But Jobs will not be Samsung's rocket to success in electronics yet. Two years later, he's ousted from his own company, and the DynaBook project evaporates. Two years after that, founder Lee dies, leaving his son Lee Kun-hee in charge of the electronic subsidiary of the conglomerate.

25:59But the new young chairman spends his time watching endless movies, driving fast cars, and chasing women. If he doesn't turn himself and the Samsung corporate culture around soon, South Korea's shaky foothold in the electronics industry will collapse and bring the Korean national economy tumbling with it.