Chapter 168: LK Smartphone Division
Chapter 168: LK Smartphone Division
The first target was LK Electronics’ former smartphone division.
The goal was to use it for the Earth Console project.
It was all laid out in my head, but I wanted to make it real.
‘If there’s money, technology, and consumers, the world lets you build anything.’
Elon Musk suddenly came to mind.
Had he envisioned all his current ventures from the start?
Musk’s projects included electric cars, satellite internet, the Hyperloop, and reusable rockets.
For an ordinary person, even one challenge would be daunting, yet he was steadily turning them all into reality.
〈Elon Musk: “SNS is essential. I want to acquire Twitter.”〉
Though he had pulled off something out of left field.
〈Earth SNS’s Success Sparks Elon Musk’s Desire for Twitter?〉
〈Elon Musk Would Need $58 Billion to Acquire Twitter〉
〈Will Super-Rich Competition Play Out on the SNS Stage?〉
Contrary to the media hype, I had no interest in competing with Elon Musk on SNS.
‘Competitors are everywhere. As long as Earth SNS gives people more fun, that’s what matters.’
I wanted to kick off the Earth Console business as soon as possible.
‘Based on past experience, handing production to Isung Electronics would work out fine…….’
I could trust their hardware manufacturing capabilities. But it felt like relying on them too much.
From a management perspective, pinning everything on one company wasn’t ideal.
‘Japanese firms would probably be expensive and slow.’
Korean companies came to mind next—specifically, LK Group, a rival to Isung Group.
LK was synonymous with home appliances, renowned for their refrigerators and washers, holding the top spot in the global household appliance sector.
Of course, losing their semiconductor and mobile divisions over the past 20 years of struggles must have hurt deeply.
“Jong-yeop, reach out to LK Group in Korea.”
“LK Group?”
“Yeah. Let’s get a quote first.”
* * *
“Earth Resource reached out?”
In his early forties, the young chairman Gu Jin-mo smiled softly at the report from his secretariat.
“Is it because we sponsored Arsenal this time?”
LK Group had signed on as a sponsor for Arsenal.
Even after Isung Group became the main sponsor, they decided to join in.
The global PR benefits were a factor, but it was really about currying favor with Kim Shin.
“Chairman, it doesn’t seem like a routine thank-you call.”
“Oh?”
“They say Kim Shin’s side wants to discuss business.”
Gu Jin-mo’s expression turned serious.
It had been three years since he took over as LK Group’s chairman.
He’d weathered COVID and many other crises, but he sensed this was a truly pivotal moment.
“Patch them through right away.”
“Yes, Chairman.”
As he caught his breath, the call connected with Kim Shin.
“Hello. This is Gu Jin-mo of LK.”
―Nice to meet you. Kim Shin here.
After greetings, the business talk dove straight in without pleasantries.
“You’re saying Earth Resource plans to launch a game console next year?”
―Yes. We’re aiming for the first half, as soon as possible. Initial production run of 10 million units, with scaling up depending on demand.
The shock of a game console launch faded quickly into astonishment at the timeline and volume.
‘Let me think. How many units did LK Electronics’ last smartphone sell?’
They’d fought tooth and nail against Isung Electronics in the smartphone race.
They’d once led with hits like the Chocolate Phone, Shine Phone, and Prada Phone, but early this year, mounting losses forced them to shut down the division.
Yet Earth Resource was starting production at 10 million for a brand-new console.
“Thank you. LK will do its utmost to produce them.”
The relationship with Earth Resource was crucial. They’d accepted the low-margin console production deal, but something bigger was on the table.
Kim Shin’s voice came through the phone.
―This might be rude, but I understand LK shut down its smartphone division.
“Yes…….”
Gu Jin-mo swallowed his bitterness. It had been his decision.
―Is the smartphone division fully disbanded?
“We’re still in the process of wrapping it up.”
There were years of R&D, plus after-sales service and parts for phones already in the market.
Factories in Vietnam and Brazil were transitioning to appliances.
Kim Shin’s voice continued.
“In that case, I’d like to buy the entire smartphone division.”
* * *
Living in Korea, I’d used LK smartphones several times.
“Sir, event special—free phones!”
I’d popped into a store after hearing that on the street and switched phones.
‘They’re crap.’
The Optimus V4, supposedly their “best.”
Compared to Kim Sang-gi’s Galaxy, the touch and handling felt off, and response times lagged.
It’d randomly reboot sometimes too.
‘Should’ve bought Apple or Isung.’
As a salaryman, Apple felt too fancy and pricey.
I thought LK phones sucked but still got three through heavy subsidies at those hotspots.
‘They all kinda suck.’
Usable, but compared to Isung Electronics’ same-year models, quality fell short.
Progress in mobiles was sluggish, always chasing dead ends.
‘They can’t keep going like this.’
LK Electronics had eventually axed the division, but their foundational tech and innovation weren’t far behind.
What really sparked my interest in LK’s smartphone division was Eddie and Oh Myeong-woo.
“Hyung, heard LK’s doing a rollable phone?”
“Rollable?”
“Press a button, and the screen expands sideways. Like unfolding paper. So cool and fun, right?”
Oh Myeong-woo chimed in from the side.
“LK’s smartphone division could’ve been huge if management had made smart calls.”
“Doesn’t that describe most companies?”
“LK especially. They make great stuff but suck at marketing it. Meanwhile, they hype the crap relentlessly.”
That’s why I coveted LK’s smartphone division.
It could mean manufacturing Earth Phones or Earth Consoles in-house.
At minimum, their hardware R&D would be a huge help.
―You mean the smartphone division?
“Yes. I want to acquire it.”
―So you’re looking to buy part of LK Electronics. LK Group generally avoids M&A or divestitures.
Gu Jin-mo sounded reluctant to let it go.
Patents, staff, factories—it’d be tricky to sell.
‘If it’s iffy, no one wants to hand it off.’
He’d know Isung Electronics bought Hunminjeongeum and distributed it worldwide.
Electronics firms were everywhere; whatever choice, there’d be regrets.
After a pause, Gu Jin-mo spoke, having decided.
―As group chairman, I feel bad for the hardworking staff in that division. I’ll need to discuss with the execs, but I’m in favor of the sale.
“Thank you for the tough call.”
―The staff will be thrilled to hear it’s going to Earth Resource.
He even sounded a bit bittersweet.
The next day, Korean papers blared headlines.
〈Kim Shin to Acquire LK Electronics?〉
〈Earth Resource, Conqueror of Content, Targets LK Group Next?〉
〈Rumors of Kim Shin-LK Mega-Deal Sweep Business Circles〉
〈LK Employees’ Blind Reactions: Overwhelming Welcome〉
Word had leaked inside LK Electronics, leading to some absurd headlines, but I checked the Blind app for employee reactions.
―Jealous of LK Electronics. Perpetual No. 2 to Isung, but new owner turns it global overnight.
―LK Electronics hits daily limit up lol wtf massive self-stock win.
―What day is it when a chaebol core subsidiary surges to the limit?
―Kim Shin hyung, won’t you acquire our company?
―Isung ditched the Hunminjeongeum team, they went to Earth Resource and became crown princes. Months later, treated as global word processor devs wtf.
―LK Electronics employee. lol Walking out of subway to work today, everyone’s grinning ear to ear. Holding stern faces in the lobby was epic.
“Hmm…….”
I only wanted the smartphone division.
LK Group would issue clarifications anyway, but I felt bad for Chairman Gu Jin-mo.
He’d see his employees’ reactions on Blind.
〈LK Group Official Statement: LK Electronics Acquisition Rumor Misreported; Smartphone Division Sale Confirmed〉
〈Kim Shin Snaps Up LK Electronics’ Smartphone Division〉
Hours later, corrections dropped, and Blind heated up again.
―Can hear LK Electronics staff sighing from here.
―Got hopes up for nothing. Total bust.
―Current Isung Electronics employee. Was jealous AF but dodged a bullet.
―Our company not for sale? Ugh…… dodging ulcers.
―Work at LK Electronics, it’s decent. But damn, would’ve been better under Earth Resource……
* * *
Seon Jae-yong, Isung Group’s vice chairman, got the intel before the press.
“LK Electronics acquisition rumors?”
“Yes, word’s spreading in business circles.”
Isung Group’s intel network dominated Korea.
“LK Electronics. Kim Shin could pull it off easily, but why bother buying them?”
“We’ll dig in ASAP.”
Isung’s management support and secretariat teams went full throttle.
Meanwhile, Seon Jae-yong pondered.
‘Planning to make Earth Phones in-house? Possible, sure, but acquiring LK Electronics just for that seems messy.’
Their Earth Resource contract guaranteed Isung exclusive Earth Phone production for two years.
After the contract expired, they could switch manufacturers; that was standard business practice.
Isung dealt yearly with Qualcomm CPU production bids and Apple memory chip races.
‘For plain manufacturing, TSMC in Taiwan or others would suffice.’
Mulling it over, a thought struck.
Isung was pushing tens of trillions into a U.S. semiconductor plant.
U.S. pressure for fab tech and market share factored in.
Seon Jae-yong asked his chief of staff.
“Kim Shin recently met President Biden, right?”
“Yes. Papers said Biden crashed at his place overnight.”
The President of the United States had even spent the night at Kim Shin’s home.
Sure, Kim Shin was young and popular—maybe Biden wanted a chill buddy image—but likely pitched key U.S. business deals.
‘Buy LK Electronics, build U.S. factories, snag finance and tax breaks…….’
Seon Jae-yong figured he had 10-20 years left as exec.
Korea’s inheritance tax for major shareholders hit 60%.
He’d pulled stunts for his own Isung handover.
Passing Isung to the next gen was legally and publicly impossible.
‘If I can’t hand the group to my kids, at least leave the prime cuts.’
Seon Jae-yong pulled out his phone and texted Kim Shin.
―Vice Chairman Seon Jae-yong: Kim Shin, any plans to invest in Isung Electronics’ U.S. plant?