The paradigm changers
Apple reported phenomenal performance in 2015, living up to its reputation as the world’s most valuable company thanks to its iPhone. But its crown has been stolen by Google, whose market capitalization is growing fast while Apple’s has slid.
Apple lost 30 percent of its market capitalization as its stock price found itself in a losing streak for more than six months. Apples’ revenue rose 1.7 percent year on year in the fourth quarter of 2015, with the poorest growth in shipment of smartphones since the iconic product was launched in 2007.
Apple remains a strong company. CEO Tim Cook still sounds confident. But when investors ask him, “So what’s next, Tim?” he doesn’t have much of a reply.
These days, the future is so uncertain that even the world’s top company cannot let down its guard and coast for a couple of quarters. The rapid evolution of ICT has revolutionized the global landscape and people’s lifestyles. The world has become borderless through advances in transportation and communications, and super-fast, free Internet connections have removed physical distance among the inhabitants on earth.
Koreans go crazy over sales promotions in distant countries like the United States and China, and hunt for bargains in cyberspace regardless of where the product is being hawked. Local companies try to attract customers from China through online shopping malls. Human lives evolve according to the development of information and communications technology and innovations. Visionary entrepreneurs paved the way to bring these changes to our lives. Steve Jobs of Apple did it, and so has Lee Kun-hee of Samsung.
Smartphones put an end to many products and companies. We no longer even remember MP3s. Smartphones didn’t just replace an audio device. They changed people’s lifestyles. Coming up with an innovative product that can create a new paradigm is risky. It can enthrall consumers if all goes well. But it can also be mocked and rejected, and lead to financial ruin.
Creativity that can change the future dominates today’s corporate and consumer world. The world expects enterprising companies like Apple to continue to lead the way and shift the paradigm. CEO Tim Cook chose the safe path in recent years and has failed to keep up with consumer expectations.
Korean companies are no better. We are now inundated with various digital pay services. They are betting on e-commerce payment systems to change the paradigm, and companies are investing heavily.
But is digital pay really that radical enough of a technology to change our lifestyles? I don’t think so. It is just a new way to pay for a product.
One good example of a paradigm shift is the way we enjoy music. In the past, we had to go to a shop and buy a vinyl long-playing record, and later CDs, to enjoy music in our free time. But now, we don’t need to own records. We buy access to the music. The way of enjoying music has changed from ownership to access. Steve Jobs paved the way with the iPod and iTunes.
Google recently challenged Korean Go world champion Lee Se-dol to a historic match in Seoul against its artificial intelligence algorithm AlphaGo. The world will be able to watch the game through live feeds on smartphones in March. Google is outperforming Apple because it continues to innovate and awe through the exploration of uncharted territories. Google does not provide useful products to consumers, but it has given us the feeling - and even the hope - that it can reshape our futures.
Most countries are struggling since the financial crisis hit them eight years ago. To get out of a cycle of stagnation, we need to replace the current paradigm and create a new benign cycle. Korea is experimenting with various new growth areas. It is still home to many globally competitive companies. Large companies are realigning their businesses. But it is uncertain if their retooling is really focused on the future or merely aimed at fighting immediate challenges. A future winner requires bolder moves to change and lead the paradigm.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, Feb. 3, Page 29
The author is a professor in the department of computer science and engineering at the Catholic University of Korea.
by Suh Hyo-joong