Is Samsung Invincible?

The Computer Electronics Show is underway and, once again, Samsung is the dominant name.

The South Korean giant, which began in 1938 as an exporter of vegetables and dried fish to Manchuria, showed off 4K TVs, OLED TVs, tools for video search, and phalanxes of smart phones. As usual, Samsung isn’t trying to create new categories of products. Instead, it just tries to be thinner, lighter or a little more advanced than its competitors in the high-end and mid-level price bands. The S-Recommendation on its Smart TVs lets you bark out a command–”Comedies!” “Mario Batali Naked!”–and the TV pops up a list of viewing suggestions.
The company also announced today that it will report around $53 billion in revenue and $8.3 billion in earnings for the previous quarter. (The official announcement was 56 trillion South Korean Won in revenue and 8.8 won in earnings.) The company sold around 500 cell phones per minute worldwide in the last three months of 2012.

Globally, it remains a solid number one, or at least a number two, in digital TVs, LCD screens, flash memory, DRAM and other products. And, of course, we’re just talking about Samsung Electronics here. The company has over 100 subsidiaries involved in construction, automotive, hospitals and other areas. Electronics is the largest part of the empire, but it’s not the only one.
What is really remarkable about the Samsung story is the consistency. Compare it to Sony. In the 1980s, Sony was a life force. It created entirely new product categories like the Walkman. It pushed its way into portable TVs. The idea was about 30 years ahead of its time, but you had to admire the audacity. It bought Columbia Pictures to merge technology and entertainment in 1989. (Panasonic, the longtime rival, followed by buying Universal Studios in 1990.) Sony, in the public imagination, was a combination of think tank and independent nation.
And then…Then came the Aibo, the freakish robotic dog that retailed for over $2000. It tried to popularize technologies like flash memory, but strangled Memory Stick with high prices and licensing restrictions. It dabbled in PCs, coming out with some of the first successful thin and light notebooks, but its commitment wavered. Attempts to recapture public adoration resulted in products like the Rolly.
Or even compare Samsung to Microsoft. Many feared the company would dominate search, entertainment and shopping on the web. But, again, the fabled merger of content and technology slipped through its fingers.
Samsung’s secret has essentially been not to get too ambitious. I began to cover the company in 2002 when Samsung was in the third year of a two-pronged strategy. The first prong involved investing heavily in advanced technology and manufacturing to create defensible market share in components. The second prong involved trying to produce high-end consumer electronics. Before 1999, Samsung was a second-tier brand name. It wanted to change that by investing in marketing, advertising and industrial design, a then foreign concept for the company.
Eric Kim, now the CEO of Soraa, was charged with the marketing effort. His first presentation with Samsung execs fell flat. But Jong Yong Yun, CEO of Samsung Electronics at the time, admonished his lieutenants not to mess with the strategy.
“He (Yun) said, ‘I know what you are thinking, but touch him, and you’re dead,” a Samsung exec told me.
The formula worked. Samsung overtook Sony in TVs and then Motorola in phones.

source