Why Samsung’s recall of Galaxy smartphones threatens its universe
As exploding batteries force recall of flagship phone, can a rising star rethink company’s business model to prevent an even bigger bang?
For Samsung, the Galaxy smartphone was once an unlikely saviour.
First released in 2009, this premium line brought the company out of a mud of obscure competitors and slung it into a duel with Apple. The world of tech entered a new epoch: these little supercomputers were its battleground, as were the giants that made them.
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Samsung had spent the previous years overtaking Sony in televisions and this was its first big shot at becoming a smartphone maker in the league of Apple. But it had strengths that doubled as problems. Samsung was (and is) known for its Spartan ethic, obsessive benchmarking and martial command structure. It can accomplish in a few months what other companies can do in a year. Now, with this month’s recall of the Galaxy Note 7 amid concerns faulty components are causing battery explosions, this model is being unmasked as a liability more than ever.
The Galaxy was the culmination of a two-decade experiment under Chairman Lee Kun-hee, an energetic visionary who in 1993 began touring the world with fiery speeches for his executives. A leader with an imperial style – South Koreans call it “emperor management” – he still commands deep respect from a generation of so-called “Samsung Men” who have poured over his booklets and teachings.
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These “Samsung Men” built the company from rickety old hardware maker to first-tier multinational. Along the way, they ran into a conundrum that continues to vex the company elite. Samsung’s growth strategy was the opposite of Silicon Valley’s, which celebrates original and risky products like the iPhone. Samsung’s ascendance rested on a very Korean and Japanese-inspired model: authoritarian managers, national pride, cautious and obsessive benchmarking, and the imitation of successful products followed by incremental innovations to them, fast (with a dose of American marketing prowess). The model works for speedy growth, but it’s too rigid for true originality.
