The National PC Initiative
"Kookmin PC?"
A startled Yoo Jae-won leaned in and studied Lee Sung-soo's business plan more closely. The document looked as if it had been printed straight from an ID presentation template—large, clear fonts paired with well-placed diagrams and charts that made it remarkably readable. The extra pages were worth it; the layout made the key points leap out at once.
The explanation of what "Kookmin PC" meant appeared right at the beginning. After reading the entire proposal with care, Jae-won realized Lee was using the term in a slightly different sense from the one he remembered. The plan called for ID Group and Sejin Computer Land to join forces and flood the market with millions of unbelievably affordable PCs. That was where the phrase "Kookmin PC" came in. Just as people spoke of the national singer or the national actor, the goal was to sell so many units that whenever Koreans thought of a PC, Sejin's model would instantly come to mind. That was the ambition laid out in Lee Sung-soo's business plan.
On paper it sounded almost impossible. How could a single model sell in the millions? Even for Yoo Jae-won that would be no small feat. Yet Lee Sung-soo was no novice in computer distribution, and the numbers he had crunched were solid.
"Could you explain exactly how you plan to build a PC at a completely different price point?" Jae-won asked. Rather than decipher every implication in the document, he preferred to hear the method directly from the man himself.
"Oh! Yes, Chairman!" Lee Sung-soo had been nervously watching Jae-won read the proposal he had pulled from his own briefcase. At the question his face lit up and he launched into an eager explanation.
"The computer components market is undergoing a massive upheaval right now. I can't help but admire you for it, Chairman Yoo. The cause of all this turbulence is the HPC components."
Lee began with praise, but he wasn't exaggerating. The HPC parts offered performance on an entirely different level from existing components, and the PC market was feeling a temporary chill. Anyone buying a computer today might feel smart, but in a month or two new models armed with HPC-certified parts would render them instantly obsolete. The performance gap was that large. Consumers were choosing to wait for the new generation.
Computer manufacturers were therefore pouring everything into building HPC machines. The race to seize the HPC market had turned into a frantic scramble for the earliest possible launch. The most critical factor was securing CPU supply, something small companies found nearly impossible. Both Intel and AMD were prioritizing massive orders. Where they once accepted orders of a thousand units during the Pentium era, the minimum had now jumped to ten thousand. Anything below that was off the table. Even if a company somehow met the ten-thousand-unit threshold, the really big players ordering in the hundreds of thousands received priority, meaning long waits.
Of course, a special relationship like the one ID Technology enjoyed meant orders could be fulfilled regardless of volume. The thousand HPC CPUs used in the big-data search engines recently delivered to the CIA had been a relatively small order, yet Intel had fast-tracked them. The combination of a close partnership with ID Technology and a CIA contract had earned them express delivery even in the middle of the frenzy. Separately, ID Technology had already placed an order for a million units to support the New Egg 2 launch.
Although the brand name belonged to TG, the industry regarded TG as ID Technology's second label. No one dared question the special treatment Intel gave them.
"What I'm targeting isn't the HPC components but the Pentium-grade parts," Lee continued. "In America they're treated as distressed inventory, but for first-time computer users they're more than sufficient."
The ultra-low-cost PC Lee Sung-soo envisioned was built around those Pentium machines that had become clearance stock. The Pentium CPU, which had launched at $999 the previous year, had fallen repeatedly and now hovered in the mid-$300 range. Three hundred dollars was still significant, but with memory and video card prices also dropping, a complete Pentium PC could be built for under $1,000. Adding a monitor, keyboard, and speakers brought the full system price to around $2,000.
The one component whose price had suddenly surged was the hard disk drive. Since it used very little semiconductor technology, it had barely been affected by the HPC revolution. There were also strong indications of collusion among certain manufacturers; 640-megabyte hard disks were still selling for more than $500.
"Even old CPUs have steady demand in the third world, so we can't source them too cheaply," Lee added. "A Pentium is outdated in the US or Europe, but in Southeast Asia or Africa it's cutting-edge. Even in Korea the 486 is still dominant, so a Pentium that runs two or three times faster would be perfectly competitive."
"That's why I need your help, Chairman. Honestly, a recommendation letter from you would carry far more weight in negotiations with Intel or AMD than anything I could achieve waving the Sejin name around."
Yoo Jae-won nodded. Gathering leftover Pentium CPUs and components to release an extremely affordable PC was, on the surface, an excellent idea. A 486 might be destined for the third world, but a Pentium would remain a perfectly usable machine in Korea for another year or two.
"One question. How much would a fully equipped Pentium PC cost under this plan?"
"If we squeeze every margin, we can bring the complete system cost down to 1.4 million won. Adding a modest profit margin, we'd like to launch at 1.5 million won."
It was a reasonable price. Once HPC computers arrived these machines would become completely obsolete, but they still offered genuine value. After all, the HPC systems Jae-won had researched started at over three million won. Even the cheapest base New Egg 2 model sat in the late three-million range, while the top-tier versions with premium parts and large Trinitron monitors reached the high four millions.
Still, Lee Sung-soo's version of the Kookmin PC differed from the one Jae-won had in mind. At 1.5 million won it remained too expensive to truly be a computer for the people. A new white-collar worker at a major corporation currently started at around 1.2 million won a month. Factory production workers earned 800 to 900 thousand. Even with installment plans to stimulate purchases, buying a computer was a heavy burden for ordinary households.
Of course, the intense Korean passion for education meant many parents would tighten their belts and buy one anyway. Hadn't Jae-won's own family done exactly that? Yet there was a way to remove that burden entirely.
The government had been aggressively pushing the Information Superhighway project for the past two years. The ambitious plan involved laying fiber-optic cables across the country to deliver ultra-high-speed internet. Trillions of won had been budgeted, and actual construction was underway. Through Daekom, fiber was already being laid as far as provincial cities. The backbone between Seoul and Busan was already operational, allowing some areas to experience high-speed service. But it had not yet reached the point where ordinary citizens could feel the difference. The cities were connected, but fiber had not yet reached individual homes.
The final connection to end users would, for the time being, be provided through ADSL just as in America. Because PC penetration was still low, even in service areas there weren't many applicants.
"What if we added PC distribution to the Information Superhighway project?" Jae-won suggested.
The superhighway wasn't finished once the backbone was installed. True completion meant high-speed internet reaching every home. Therefore it was perfectly reasonable to include household PC distribution in the project.
"What exactly do you mean?" Lee asked.
"When someone purchases a PC, the Information Superhighway task force would provide a set subsidy."
The budget allocated for the project was in the trillions. Even after carpeting the entire country with top-grade fiber, several trillion won would remain. Left alone, that money would simply disappear into someone's pocket. It was better to use it for its intended purpose. Even a modest subsidy when buying a computer would dramatically ease the burden on parents.
"A subsidy of three to four hundred thousand won per unit should be enough to make a real difference, don't you think?"
At 300,000 won per unit, the remaining Information Superhighway budget could support roughly three million units.
"And I believe I can help here as well. If customers who buy a Kookmin PC also sign up for ADSL service, Daekom could offer additional subsidies."
In the 21st century, internet providers routinely handed out 200,000 won in cash gifts to new subscribers. Adding internet TV or VoIP services could push the gift as high as 500,000 won. The arrangement worked because customers signed long-term contracts. By locking in three years of service without switching providers, the company could secure future revenue that more than covered the upfront cash gift. From the carrier's perspective there was no loss.
Jae-won intended to apply this model to the Kookmin PC. Daekom was the company running ADSL in Korea. Although it was a public enterprise, thanks to connections from the previous administration Jae-won held a thirty-percent stake. In a purely private company that might not allow much influence, but Daekom was different. Every project it handled—from the Information Superhighway to ADSL—was closely tied to Jae-won. Offering subsidies to ADSL applicants would be simple.
"For a three-year contract, 250,000 won. For five years, 500,000 won. That should help considerably, yes?"
In truth, cash gifts only appeared once the market became a brutal red ocean with no new subscribers left to fight over. The current situation was the opposite, yet the incentive remained effective. Subscriber numbers were still too low for direct support not to have impact. Long-term contracts would also naturally restrain the flood of new internet providers that would soon sprout up. Consumers benefited as well. With both subsidies combined, buyers could receive up to 800,000 won in support. A 1.5-million-won PC would suddenly become a 700,000-won PC. Add installment payments and even modest households could afford one. Only then would the name "Kookmin PC" truly fit.
At the same time, the spread of Kookmin PCs would dramatically increase ADSL users. That, in turn, would create the foundation for new industries built on the internet. The only obstacle was Daekom's relatively small capital base, but Jae-won could solve that simply by opening his own wallet. He could acquire additional shares under the pretext of supporting the ADSL rollout and use them to fund the subsidies. Looking at the history of the civilian government, enterprises like Daekom that performed large public projects without earning much profit were usually privatized. There should be no major difficulties.
"Huk! You're talking about a 500,000-won subsidy?" Lee Sung-soo shot up from his seat in shock.
"Yes. It's not really a loss. We're projecting monthly ADSL fees at around 20,000 won. The subsidy would be recovered midway through the contract, and the remainder becomes pure profit."
As a bonus, the mass adoption of ADSL alongside the Kookmin PC would accelerate the popularization of the internet, further strengthening ID Group's position.
"My god," Lee murmured, stunned by the scale of Jae-won's thinking.
He had only planned to gather now-obsolete Pentium parts and release them cheaply. That alone, he had calculated, would let him surpass the big corporations' offerings. That was why he had taken the expensive flight to America to meet Jae-won. Yet after a brief glance at the business plan, Jae-won had produced something far beyond what Lee had imagined. If Lee had spent more time refining his own proposal, could he have reached the same conclusion? After a moment's reflection, he knew the answer was no. The very idea of securing government subsidies for PC distribution was not something just anyone could conceive. Offering hundreds of thousands of won in incentives simply for signing up for internet service was revolutionary marketing.
Then, suddenly, Lee's face went pale.
"Then... what happens to our partnership with Sejin?"
The scale of the project had grown beyond recognition. With Jae-won's influence over the government, he could certainly negotiate to include Kookmin PC distribution in the superhighway project. He could implement the ADSL subsidies on his own. Lee realized there might be no place left for Sejin Computer Land.
"You're right. As you said, this is far too large a project for one company alone."
Yoo Jae-won watched the visibly shaken Lee Sung-soo and fell into brief thought. He could easily exclude Sejin Computer Land from this venture. Although Lee had left his mark on Korean computer history, the side effects had been severe. The military-style management had caused great harm to Sejin's employees. Delayed parts payments and reckless expansion had seriously undermined the entire IT industry. In his previous life, the darkness had outweighed the light. But that future had not yet occurred. Just as Jeon Myeong-heon had changed, perhaps Lee Sung-soo could change too. At this moment, Jae-won could neither confirm nor deny it. Instead, he would reward Lee for flying all this way and sparking the Kookmin PC idea.
"This is a project that offers at least 550,000 won, sometimes as much as 800,000 won in subsidies per PC. The pool of potential buyers will be enormous. Selling millions of units will be easy. No single company could handle that volume alone. Besides, giving everything to one firm would invite accusations of favoritism."
Lee nodded vigorously with each sentence. He wanted to argue but found no openings; every point was correct.
"They'll probably divide the allocation between large corporations and SMEs. Since you've come all this way, I'll make sure Sejin is selected for the SME portion."
"Huk! Are you serious? Thank you!" Lee looked like a man resurrected from the dead, pouring out gratitude.
But Jae-won wasn't finished.
"There are conditions."
In Korean, one should always listen until the very end.
"ID Group's tradition is rock-solid substance. No matter how close the partnership, the word 'insolvency' leaves a bad taste. If you work with us, you must focus on building a healthy foundation."
"Yes? Y-yes?"
"That means no reckless expansion. You were planning to open dozens of directly managed Sejin stores nationwide, correct? I believe ten super-sized flagship stores of four or five stories across the entire country would be sufficient. The rest of the regions should be covered by dealerships or appropriately sized stores. That would be far more effective."
Lee's expression showed he had never expected this.
"Also, put an end to the violence and military-style culture. What era do we live in that such things are still acceptable? We didn't even do that in the 1960s or 70s."
At the word "violence" Lee sucked in a sharp breath. During the operation of his flagship store he had lost his temper with subordinates several times and thrown punches. He thought he had smoothed things over with apologies and gifts afterward. He never imagined it would reach Yoo Jae-won's ears. There had been rumors during the last presidential election about how terrifying ID Group's intelligence team was. Experiencing it firsthand left him speechless.
"In return, if you truly innovate, I'll invest five billion won. I'll also make the introductions to Intel and AMD."
At the mention of five billion won, Lee Sung-soo's eyes widened dramatically. Money was exactly what Sejin lacked most right now. The first flagship store, remodeled like a department store, was enjoying explosive popularity. Opening identical stores nationwide would be like raking in money with a rake. The only problem was capital. Although computers sold well, after paying parts suppliers and employee salaries there was little left. With major corporations sniffing around, Lee's anxiety had reached its peak. That was why he had rolled the dice on the Kookmin PC business plan and flown to America.
"Thank you!" Lee shot to his feet and bowed deeply.
Yoo Jae-won's version of the Kookmin PC was already an enormous project. If word spread in Korea that Sejin had secured investment from ID Group, the company's reputation would rise to another level entirely.
"What I've asked of you must be strictly observed. I don't speak empty words. You know what has become of the Ilsung subsidiaries, yes?"
Jae-won emphasized the point again in case Lee might later have second thoughts. The warning was clear: if the old habits returned, as an investor he would not hesitate to take legal action.
"Of course! I understand better than anyone! I will do everything possible so that you are not disappointed, Chairman."
Yoo Jae-won nodded. Anyone could say the right words. Besides, in his previous life this man had a track record of causing trouble. Words alone weren't enough; Lee would have to prove himself through action.
"Discuss the details with Chief of Staff Choi Kang-wook once you're back in Korea."
At ID Technology, Alan handled the legal aspects of investments. But Lee spoke no English, so pairing them would only cause anxiety. Although Choi Kang-wook's title was Chief of Staff, he was effectively managing ID Group's Korean operations. Handling the Sejin Computer Land matter would present no problem.
After sending off the repeatedly bowing Lee Sung-soo, Jae-won fell into brief reflection. Memories surfaced of visiting Sejin Computer Land in his previous life—playing games, attending computer classes. He hadn't paid much attention during the lectures because he was too busy gaming, but he remembered how dedicated the instructors had been. The consideration and investment he had just shown Lee weren't because he particularly liked the man. It was more accurate to call it repayment to the nameless Sejin employees who had created good memories in his past life.
If, even after all this, nothing changed?
Then Jae-won would simply exclude them from the Kookmin PC project entirely.
"What time is it in Korea right now?"
Checking his watch and confirming it was still business hours, Jae-won picked up the phone. Adding Kookmin PC distribution to the Information Superhighway project would require cooperation from the political sphere. The person best suited for that was naturally Prime Minister Jeon Myeong-heon. Although the Ministry of Communications and Posts was officially in charge, nothing was more reliable than Jeon Myeong-heon taking action.
Even so, if the internet spreads rapidly through the Kookmin PC, there needs to be something for people to actually do online.
While waiting for the call to connect, another thought rose in Yoo Jae-won's mind. Even with computers and internet access, without compelling online content the explosive power of the Kookmin PC would be limited. To truly ignite the market, a killer title that could captivate the entire nation was necessary. That conclusion came naturally.