Foundations of an Empire
Tzar Yoo Jae-won settled into his seat in the executive conference room of ID Technology alongside the company presidents. A long rectangular table stretched before them, with a massive screen formed by multiple projectors on the opposite wall. High-performance speakers were connected as well, allowing not only the display of presentation materials but also remote meetings via ID Talk video conferencing. Until yesterday there had been no designated head seat, but today a special chair had been placed in the center to mark its importance. Yoo Jae-won took that seat, with Remington on his right and Ellen on his left. The presidents then arranged themselves according to rank. Though ID Group’s corporate culture was thoroughly American, even in the United States hierarchy still existed. Yoo Jae-won in particular used formal speech with anyone older than himself. English might lack honorifics, yet respect could be conveyed through tone and choice of words. That practice had evidently spread among the executives as well, resulting in the current seating arrangement.
“Well then, shall we begin with Technology, the very foundation of ID Group?”
Once the brief opening remarks about reflections on 1998 had concluded, Yoo Jae-won moved straight to the main agenda as usual.
“Yes, Mr. Chairman.”
Ellen rose from her seat and stepped in front of the screen. Recommended by Remington, she had joined ID Group and built an impressive record as head of the corporate legal team, leading the lawsuit against Microsoft. When she assumed leadership of ID Technology following Remington’s promotion, some had viewed her appointment with skepticism—wondering whether a former lawyer could successfully steer Silicon Valley’s premier technology company. In the end, her selection proved to be the right choice.
“1998 was a year in which ID Technology achieved broad expansion across multiple fronts, built upon a solid foundation,” Ellen began. “Among our most outstanding accomplishments is the sales volume of the Tiffany Phone series. More than ten million users worldwide chose our Tiffany Phone.”
Immediately, the achievements of ID Technology in 1998 appeared on the large screen. The first figure displayed was the sales volume of the Tiffany Phone 2. As Ellen stated, it had reached the milestone of ten million units sold globally. Yet in terms of market share, the company ranked second. First place belonged to the renowned Nokia, which had reportedly sold over twelve million units. Despite the second-place ranking, no trace of disappointment appeared on Yoo Jae-won’s face. While Nokia led by two million units in volume, ID Technology held a decisive advantage when quality and revenue were considered. Most of Nokia’s sales came from low-end models priced at roughly half the cost of a Tiffany Phone. When measured by actual revenue, ID Technology stood at the top.
“We recorded five million units sold in the United States, three million in Korea and Japan combined, and one and a half million in Europe,” Ellen continued. The remaining five hundred thousand units were listed under “other,” covering countries such as Russia and Canada. Once again, America had not betrayed Yoo Jae-won’s expectations. More than half of all Americans who subscribed to mobile services the previous year had chosen the Tiffany Phone. Particularly striking were the explosive sales in Korea and Japan—approximately two million units in Korea and one million in Japan. Korea’s rapid adoption of cutting-edge technology was unsurprising, but Japan’s performance was notable. The Japanese government had blamed hedge funds for the economic crisis marked by the sharp rise in the yen and the collapse of the Nikkei index, and ID Investment had never been absent from that list. Yoo Jae-won’s face had appeared repeatedly on Japanese broadcasts, though always in a negative light. Nevertheless, Tiffany Phone sales in Japan remained strong. Analysts attributed this to the series’ design perfectly matching Japanese tastes, combined with overwhelming performance, convenience, and flawless Japanese-language support that left competing phones far behind.
“Preparation for mass production of the next-generation T-Touch Phone has also been completed smoothly.”
The T-Touch Phone was ID Technology’s trump card for 1999. Although the Tiffany Phone had received continuous upgrades since its launch, it had always retained a physical keypad. The T-Touch Phone eliminated the keypad entirely. Its LCD display module extended into the space previously occupied by the keypad, creating a vast screen. A virtual keypad replaced the physical one, allowing users to control every function through touch. While true smartphone capabilities were absent—the development of the miniature sensors essential for smartphones had not yet been achieved—the device would feature the latest mobile application processor, ample flash memory storage, and expanded RAM. This would provide a tantalizing preview of what a proper smartphone could offer before the real thing arrived. Naturally, the App Store from the Livepod would also be ported to the T-Touch Phone.
The name had been changed to T-Touch Phone because “Tiffany Touch Phone” simply felt awkward. The idea of “touching Tiffany” was something only Yoo Jae-won was permitted to do. Realizing the unintended implication of naming a phone after his girlfriend, he had opted for the new designation. He had also secured the “Tiffany Touch Phone” trademark in advance to prevent other companies from appropriating the Tiffany brand.
“The mobile phone division recorded total revenue of 5.1 billion dollars in 1998, with net profit of 1.02 billion dollars at a 20 percent margin.”
Spontaneous applause broke out. In the past, Apple had achieved margins exceeding 50 percent, but that figure had come through drastic cost reductions and outsourcing—most notably by entrusting manufacturing to Foxconn, a Taiwanese company notorious for its labor practices, and securing massive advance orders to drive down component prices. In contrast, ID Technology produced its components internally. Only the final assembly had been outsourced to TG’s factories, and even that process had begun shifting to Daeho Electronics the previous year, with Ilsung Electronics’ plants scheduled to join this year. Because the costs of producing Tiffany Phones circulated within the group, they posed no significant burden. Still, Yoo Jae-won remained unsatisfied despite the record sales. The mobile phone market in the early 2000s would be capable of selling ten million units per month.
“Next, we turn to the ID Display division.”
Ellen advanced the slide amid the applause. Based in Daejeon, ID Display was technically a subsidiary of Technology, yet within ID Group it was treated as an integral part of the same entity. The separation existed purely for convenience; management and technological development remained under Technology’s oversight.
“While the display division may not be as flashy as the mobile phone division, it possesses formidable strength—ID Technology’s second punch, if you will.”
Having prepared early for the LCD industry, ID Display held the most advanced technology in the field. It dominated the mobile LCD module market and received overwhelming praise from experts at display conferences for its large-format modules suitable for monitors and televisions. Yet Yoo Jae-won still found the performance lacking by his own standards. Response time, brightness, color reproduction, and viewing angle—all fell short of what he considered acceptable. However, judged by 1999’s technological level, no competitor could match ID Display.
“Our market share in mobile display modules stands at 60 percent,” Ellen announced proudly. The absence of rivals was reflected in that commanding share, though 60 percent still felt insufficient to her. “Once the process conversion at the third plant is completed, the supply shortage will be resolved.”
Despite previous expansion, production had failed to keep pace with orders. The Tiffany Phone had demonstrated that large LCD modules could be successfully used in mobile devices, prompting consumers to demand larger, more vibrant screens. Demand had surged accordingly. Yoo Jae-won had also permitted competitors to purchase the same high-performance components without discrimination, reasoning that a factory running at full capacity was always profitable. Orders continued to rise, yet production lagged. Ellen reported that the third plant—formerly Ilsung Electronics’ LCD display facility, acquired through the takeover—would finally alleviate the shortage once operational. The acquisition had yielded more than just semiconductor plants; Chairman Choi Hyun-hee had possessed remarkable foresight as well. However, ID Technology’s engineers had identified numerous deficiencies upon inspection, leading to process modifications aimed at improving yield and technological standards.
Ellen’s presentation continued. Given the vast scope of ID Technology’s operations, she remained before the screen for over an hour. Yet not a single person, including Yoo Jae-won, showed any sign of boredom. The length of her report was itself proof of how exceptionally well ID Technology was performing. The computer division, represented by the Newegg and iWorks series, had also posted solid sales. Newegg sales had dipped slightly to 2.26 million units, but the iWorks series—combining PCs and laptops—exceeded one million units sold, surpassing 1997’s total revenue. Cumulative Livepod sales had surpassed 2.5 million units. ID Office 98 had sold over five million copies. Cloud computing systems for government offices and corporations had generated billions of dollars in revenue. All of it was welcome news.
“Consequently, ID Technology’s total revenue for 1998 reached 12.8 billion dollars, with net profit of 3.84 billion dollars after all expenses.”
When the final chart displaying overall revenue and net profit appeared, everyone applauded. Mobile phones alone had generated over five billion dollars in revenue, displays another three billion. ID Office remained a reliable profit center. “Let us take a short break before proceeding to the next report,” Yoo Jae-won announced, granting a thirty-minute recess. Normally he would have continued without pause, but the death of Jeon Myeong-heon had changed his perspective. One of those changes was an absolute prohibition on overwork. The thought of Remington or Choi Kang-wook suffering from exhaustion was something he refused to entertain. Preventing such an outcome was essential. Yoo Jae-won extended this policy not only to executives but to all employees—and to himself as well. What would be the point of returning to life only to die from overwork? He moved to the chairman’s office, reclined the chair, and lay back almost horizontally. He had intended to nap briefly, but his mind refused to rest.
“If Technology’s net profit is 3.84 billion dollars… then if we were to list it, we could value the company at roughly 76 billion dollars.”
Despite having declared a break, work had already crept back into his thoughts. Yet this was beyond his control. The mind was a curious thing—it refused to obey simple commands. Since his body was resting, he reasoned, he had not broken his promise. His thoughts continued.
“I believe the average PER of companies listed on Nasdaq is around 20 right now?”
During the height of the IT bubble, many companies had traded at PERs of 40 or 50. After the bubble burst, the ratio had fallen to 19 or 18 before rebounding slightly to 20. While not precise, applying that multiple suggested ID Technology’s current value was at least 76 billion dollars. The key word was “at least.” Valuation by PER was a crude method with significant margins of error, particularly since it failed to account for ID Technology’s future vision. The mobile sector was only beginning and held enormous promise. The same applied to LCD displays—replacing the world’s bulky televisions and monitors with LCD technology represented a massive profit opportunity. Beyond that, ID Technology had invested in numerous Silicon Valley tech ventures, as befitted its name. What appeared reckless today would fuel a second leap forward once their potential exploded in the twenty-first century.
“Google is a perfect example.”
The venture was among the most recent additions to ID Technology’s angel investment portfolio. Founded by Stanford students Sergey and Larry—both from the same university Yoo Jae-won had attended—it would grow into a colossal enterprise that wielded enormous influence even until the final moments of his previous life. At present, it was so insignificant that Ellen had not even mentioned it during her year-end report. With an investment of only six million dollars, ID Technology had secured a 49 percent stake in what was still a very small company.
“Mr. Chairman, it is time.”
Thirty minutes later, Kim Dae-seok arrived precisely on schedule to escort him. Yoo Jae-won rose immediately and returned to the conference room, where Vincent Greenhill of ID Investment was already waiting for him as the next presenter.