There were moments this week when it felt as though the issues were of “Samsung Weekly” because of the news before IFA that covered TVs and monitors and the launch of the much anticipated Note 8. Just as we were going to press, the news broke of one of the family that owns Samsung being sentenced to five years imprisonment for corruption. However, it seems to us that the person involved is so far ‘above the cloud layer’ that there would be little or no impact on the company, so we didn’t run it as a late story. It seems the markets also weren’t phased by the decision and when I looked, the share price of Samsung Electronics had gone up (although it may have changed by the time you see this).
Samsung has had an amazing year. The company, at the moment, seems to be impervious to the impact of problems on its brand. Despite the Note 7 debacle, the company seems to have a lot of loyalty from its smartphone buyers, even those that were impacted by losing their Note 7s. The Note 8 is, just about, unique. Although you can get each of the features on another product, to the best of my knowledge, no other phone matches all the features. That’s not easy as everybody hits the same limits, although, of course, Samsung and Apple have the resources to throw lots of engineers at a problem in a way that others don’t.
When I think back about the problems that Sony has had in the past with the root kit and other issues, the attitude to Samsung seems to be completely different. I wonder if this is because Sony is more popular with older buyers who tend to be further down the technology adoption cycle, whereas Samsung has a younger customer base which is more comfortable with risk? Perhaps these younger buyers have a lower concern about the brands they buy being consistent in their values? That may reflect deeper cynicism about brands and companies in general. It may also reflect differences in regional strength – Sony was strong in the US, Japan and Europe, whereas for Samsung its key markets have been more global. It’s several years since I went to Akihabara in Tokyo but I still remember the shock that there were no Samsung or LG products on sale in big stores such as Bic Camera. I note that the company’s website still doesn’t sell Samsung TVs, although smartphones are available.
Now, with success comes the danger of ‘hubris’, the ancient Greek concept that means a dangerous overconfidence that means taking too much risk on the basis that an individual can ‘defy the gods’. We’ve sometimes seen signs of this with Samsung. The company adopted a dramatic concept for OLED TV with a plan to make RGB OLEDs on LTPS backplanes. I won’t go through all the huge technical hurdles, that other companies had not been able to overcome. Samsung was so keen to put ‘clear water’ between itself and the Chinese, who were intent on taking the LCD business, that it took too much risk. I don’t know how much Samsung lost in abandoning the attempt to bring the technology to market, but it was a lot as it had a huge engineering effort.
The same, on a much smaller scale, may be happening with QD technology. Samsung has promoted its QD-based top of the range of TVs as “the best”, but those that care about image quality are not convinced, because Samsung has used edge lighting rather than direct array backlighting. I suspect that someone in Samsung’s TV division became convinced that the firm’s brand and marketing power could mean that it would be able to brush LG’s OLEDs aside. So far, that hasn’t happened.
In the case of the quantum dot TVs, the risk was much less than the decision to try to develop big OLEDs, and I am confident that the company will sort the problem out and start to get the technology closer to the performance of OLED, but it’s another lesson that hubris is always a danger when companies are so successful. However, the company’s apparent ability to simply glide past problems may not persist forever.
Bob
