The Seoul of Design

On the third floor of the Time Warner Center in New York, just below Thomas Keller's $210-a-plate and perpetually booked restaurant Per Se, is Samsung's equally sleek offering, where you don't need a reservation. Walk through the glass doors that look out onto Columbus Circle, pass by a forest of plasma screens, and you'll see the future as the Korean electronics giant would have it.

Elegant and austere, the Samsung Experience showroom invites visitors to live, work, and play in a luxurious, fully operational world of network-controlled refrigerators, "hygienic power" vacuum cleaners, nanotechnology-enabled air purifiers, steam-cleaning microwave ovens, ultralight notebook computers, sumo-sized liquid-crystal display TVs, near-silent laser printers, all-in-one digital cameras, and dozens of do-everything cell phones. The place amounts to a temple for the hip and technocentric; on a typical Saturday, it draws more than 1,500 acolytes.

Twelve years ago, Samsung's enigmatic chairman, Kun-Hee Lee, endured a different kind of experience when he visited a decidedly inelegant electronics retailer in Los Angeles. Lee found his company's products gathering dust on the store's back shelves, ignored by even the salespeople. American consumers, he realized, regarded the Korean company's wares as cheap, toylike knockoffs, best suited for the discount bin. Right there, he decided that Samsung's very survival in the U.S. market was in peril.

Not long after that visit, Lee issued a manifesto to Samsung's top executives, which he later repeated in a book, Change Begins With Me. "Management is still clinging to the concept of quantity at the expense of quality," he declared. "We will become a third-rate company. . . . We must change no matter what." He implored workers to "change everything except your wife and family"--a decree that's still talked about within Samsung. To shatter old work habits, he ordered that henceforth, every Samsung employee must report for work two hours early.

Lee's ultimate aim was simple and audacious: To seize the future, Samsung would have to catapult to the uppermost ranks of the world's first-class brands; it would have to become a company whose vast array of digital products not only met people's needs but also captured their imaginations. Today, Samsung has come a long way from its humble, homely past. The consulting outfit Interbrand calculates that it's the world's fastest-growing brand over the past five years: Samsung is now the world leader in CDMA cell phones; it's battling Motorola for the number-two spot, behind Nokia, in total handsets sold; it also tops the global markets for color televisions, flash memory, and LCD panels--key battlegrounds in its quest to one day dominate the digital era. Last year, Samsung racked up $10.3 billion in earnings on $55.3 billion in sales, which made it the world's most profitable tech company.

This year, to be sure, Samsung has hit some headwind in the form of plunging profits and a political scandal in Korea. And in October, the company agreed to pay a $300 million criminal fine for conspiring to fix computer-chip prices in the United States. Despite those woes, Samsung's shares are trading at a near record high; it has just launched a global marketing campaign; and it's on pace to ship

28 million units in the United States alone. Back in its homeland, Samsung might be unloved, but it is greatly respected for its growth, its technological prowess, its 20.7% share of Korea's total exports, and for transforming the tagline "made in Korea" from a pejorative to a source of pride. Samsung has, indeed, changed everything.

Steve Jobs is design's rock star, but a reclusive Korean billionaire may have surpassed him.

The change began with Lee's bet that in a world where products are rapidly becoming commodities, Samsung would never thrive through scale and pricing power alone. It had to create stylish, premium digital products that sparked customers' emotions with elegant, human-centered design. Lee foresaw that Samsung could wield design as a competitive weapon and use it to transform itself from an also-ran imitator to a world-class innovator. Steve Jobs may be the rock star of product design, but the reclusive Lee, a 63-year-old billionaire who is little known outside his native country, has arguably done more, on a larger scale, to seize on design's ability to create great business opportunities. And by some measures, Samsung has even surpassed Apple in the quest for design excellence. Over the past five years, Samsung has won more awards from the Industrial Design Society of America (IDSA) than any other company on the planet. "Samsung is one of the world's most respected companies for its designs," says Michelle Berryman, executive vice president of IDSA and a principal at Echo Visualization, an Atlanta-based design consultancy. "Its flat-panel TVs, for example, are so elegant that people are willing to pay a premium for them, just like the iPod."