Samsung/LG Intimidated by Chinese at CES
January 23, 2017


The Korean press has noted that Samsung & LG executives who attended the Consumer Electronics Show earlier this month were intimidated by Chinese companies that had improved their home appliance technology since last year, according to conversations with top Korean government officials.  A Samsung official stated, “We were intimidated to see improved hardware technologies of Chinese firms at the event.  Although they are still behind us in terms of providing customer experience, the gap may also be narrowed when they utilize open, established platforms.”  While LG was focused on more specifics, they said, “We also felt threatened to see Chinese firms.  They are unveiling copycat products within three months of global firms launching new products and the technologies are still high.  We need to move forward more rapidly.” Senior research fellow at the Korea Institute for Industrial Economics and Trade, Cho Chuel, added that, ”Korea companies should ditch traditional ways of working alone and make an open ecosystem to work in partnerships with more start-ups or global tech firms,” and astute comment in our view, but other articles in the Korean press indicated that industries that have potential for South Korean or other foreign companies, such as drones or VR, have already been squeezed by Chinese rivals.  While companies and governments have been complaining about competition from others since manufacturing began, and China is already facing challenges of its own as wages rise on the mainland and wage competition from Vietnam or Indonesia pushes global companies away from China, but China does have one advantage, government funding.  China still remains constrained as to skilled and experienced engineers.  Unskilled might be the wrong word, as it is certainly a talent to be able to reverse engineer a product and produce a clone in 3 or 4 months, but more a lack of creativity or thinking out-of-the-box, something the US is well known for.

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