 |
| English: Samsung Logo Suomi: Samsungin logo (Photo credit: Wikipedia) |
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.
