Why the name “Galaxy”? Samsung has never publicly told the story.
But over coffee in Palo Alto, California, former Samsung senior vice
president Ed Ho told me about a $95 bottle of wine enjoyed by its top
executives, the Terlato family’s “Galaxy” red blend. It inspired Samsung
executives to later choose the name “Galaxy,” which had to them a
premium ring, for their phones.
Unfortunately, the first Galaxy smartphone didn’t hit the mobile phone
sweet spot. It came in four variations, confusing users: “Epic” was sold by
Sprint, “Fascinate” by Verizon, “Vibrant” by T-Mobile, and “Captivate” by
AT&T. Apple, meanwhile, had a single phone on the market. One. As a
result, the name “iPhone” conjured up a cohesive image among consumers
and craftsmen, creatives and hipsters. “Galaxy” was the second-moving
wannabe with no cohesive brand.
Steve Jobs was livid when Samsung released its smartphone. As he told
biographer Walter Isaacson, he wanted to launch “thermonuclear war” on
Android, the operating system used in Samsung phones. Samsung was the
Apple iPhone chip supplier that dared to compete directly against Apple by
making a similar-looking smartphone, and with the Android operating
system, which Jobs abhorred. Jobs was prepared to sue. Tim Cook, as
Apple’s supply chain expert, was wary of endangering the relationship with
a supplier that Apple depended on.
When Jay Lee visited the Cupertino campus, Jobs and Cook expressed
their concerns to him. Apple drafted a proposal to license some of its
patents to Samsung for $30 per smartphone and $40 per tablet, with a 20
percent discount for cross-licensing Samsung’s portfolio back to Apple. For
2010 that revenue would have come to $250 million.
In the end, Samsung’s lawyers reversed the offer. Since Apple was
copying Samsung’s patents, they argued, Apple had to pay Samsung.
In April 2011, Apple filed multiple lawsuits, spanning dozens of
countries, against Samsung for patent infringement. It demanded $2.5
billion in damages. Samsung quickly countersued for infringement of five
patents relating to its wireless and data transmission technology.
The war was on.—
WAS SAMSUNG, RESORTING TO “fast-following” in terms of new products,