Samsung vs Apple: Reuters Says Samsung's Hastiness Was a Mistake
Reuters reported that Samsung's rush to beat Apple's new iPhone this September, has pushed the Korean tech giant to accelerate the launch of its new phones, but in its haste stumbled in quality testing.
In 2015, Samsung, the world's largest manufacturer of smartphones, launched its latest phones in the Galaxy S and Galaxy Note series a month ahead than its original release date.
Reuters said that for the June quarter, the strategy helped Samsung to its best profit in more than two years, but it is also putting strain on its supply chain and its manufacturing reputation.
Tragedy struck on Friday, September 2nd, two weeks after Samsung launched its well-received Galaxy Note 7. The company had to recall the Galaxy Note 7 in 10 markets including in the company's home market, South Korea, and the United States after early buyers discovered that the lithium ion batteries of the phone were prone to ignite. Samsung halted sales of the $891 device in those markets indefinitely.
The unfortunate incident is a great setback for Samsung's efforts to secure its market share in the smartphone industry after being beset by pesky cheap rivals in China and Apple's near undisputed dominance in the premium category.
Reuters quoted Chang Sea-Jin, business professor at Korea Advanced Institute of Science and Technology who said "Samsung might have over-exerted itself trying to pre-empt Apple, since everybody knows the iPhones launch in September. It's an unfortunate event; it feels like Samsung rushed a bit, and it's possible that this led to suppliers also being hurried."
Samsung said in a statement to Reuters that it conducts "extensive preparation" for its products and will release them to the market "only after proper completion of the development process".
The firm said on Friday it had identified a problem in the manufacturing process of a battery supplier it didn't name. "I am working to straighten out our quality control process," Samsung's mobile business chief Koh Dong-jin said then.
The massive recall might cost Samsung nearly $5 billion in revenue this year.
The unfortunate battery problem follows a separate supply-chain management issue that caused Samsung to have disappointing sales of the Galaxy S6 series in 2015.
Retuers reported that Samsung executives said production problems for the curved screens and metal casings used in the Galaxy S6 edge led to a supply shortage for the device, leaving the firm unable to capitalize on the critical acclaim the phone received, sapping earnings momentum.
Reuters quoted Counterpoint analyst Jeff Fieldhack who stated that Samsung usurped LG Electronics' thunder when the firm launched its G5 smartphone this year by aggressively starting the sales of the Galaxy S7 smartphones a month ahead and backing them with an intense marketing campaign.
"I believe they were trying to create a similar effect by beating Apple to market by (about) a month, too. Very often, lab times and testing periods are shrunk to expedite approval and time-to-market of key devices. It is possible all charging scenarios were not thoroughly tested," Fieldhack said.
A Samsung executive who declined to be named told Reuters before the recall announcement: "Our production engineers and managers are extremely experienced, and if you ask them to find a solution to adopt a design change, they'd promptly bring things under control. "But even that capability is under growing strain, as we try out new materials and everything is on a very tight schedule."