By Daisuke Wakabayashi
A Samsung Electronics Co. executive said its gains in the U.S.
smartphone market are the result of a strategy shift begun in 2011,
not because it "followed" Apple Inc.'s iPhone.
In the first courtroom appearance by a Samsung executive during
the high-stakes patent case against Apple, former U.S. mobile
division chief executive Dale Sohn said the Korean firm
successfully changed its approach from marketing its products
together with mobile carriers to promoting its own brand.
"We really made a remarkable turnaround," said Mr. Sohn, noting
that the company's market share went from around 10% of the U.S.
smartphone market in 2010 to more than 30% in 2012. He is now an
executive adviser at Samsung's headquarters in Korea.
Under questioning from Apple's lawyers, Mr. Sohn played down
Apple's influence on Samsung's strategy.
Apple challenged that notion and presented a message that Mr.
Sohn wrote in an April 2012 internal presentation: "Beating Apple
is no longer merely an objective. It is our survival strategy."
Mr. Sohn's testimony in San Jose, Calif., focuses on a core
tenet of Samsung's case. Samsung says its success in the U.S.
smartphone market wasn't the result of copying Apple's software
features--for which the iPhone maker is seeking $2.2 billion in
damages--but its differentiated products and a successful, new
marketing approach.
Apple wrapped up its case on Friday, arguing that Samsung copied
its software features to make its products easier to use, and
overcome a perceived weakness with consumers.
When Apple introduced the iPhone in 2007, Mr. Sohn considered it
a "niche" product because it was expensive compared with existing
feature phones and AT&T was the only carrier offering the
phone. He said he thought the iPhone was an impressive product, but
he saw potential for Samsung to compete.
In early 2011, however, Mr. Sohn said he noticed "worrying
signs" in Samsung's position in the smartphone market and decided
to implement a "paradigm shift" over a two-year period. "We were
quite behind," he said.
Before its strategic shift, Samsung had been adopting a
"wholesale" strategy--focusing on its relationship with major
carriers--instead of targeting consumers directly with a
brand-building campaign.
Mr. Sohn, a 31-year Samsung veteran, said consumers didn't
identify closely enough with the Samsung brand. So Samsung worked
with retailers to create spaces allocated specifically for Samsung
products and placed advertisements year round, instead of only
around product launches.
By the end of 2012, Samsung was the best recognized and most
preferred brand in the U.S., Mr. Sohn said.
To dispute Samsung's claims about its marketing approach,
Apple's lawyers showed the jury internal emails from Samsung
executives saying that the company needed to dispel the notion that
it was a "fast follower" in smartphones and questions about
"product quality" because of the plastic casing of its
handsets.
Samsung also called three Google Inc., engineers to the stand to
assert that Google had previously been working on the software
features that Apple is accusing Samsung of copying, to integrate
into Google's Android operating system. Samsung uses Android on its
smartphones.
Apple's lawyers sought to emphasize that Google's engineers
weren't aware of how Samsung's software team may have modified
Android for its smartphones.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires