While chasing the figures on what would be the harm for Samsung tied to the withdrawal of Note 7, in a more expanded appears clear look like story is not “tragic” as it is sometimes presented and how it can be quite a step, and not the first, of a strange labyrinth in which is over Samsung Mobile.
The division of the Korean giant has grown dramatically in recent years, even 100% year over year, and has gained a market share unthinkable just a few years ago. Almost morbid fixation for continuous growth typical of Koreans (and in particular the Samsung Galaxy) is not only part Asian nature, and obtained but it is a fundamental pillar of a very hardware-centric business model powered by steady increase in quantity, even if it means a drastic reduction in margins. In recent seasons, especially in Western markets, the smartphone market has begun to show signs of saturation, with an installed base that now covers almost all of the potential users. Samsung, which certainly finds it difficult to further increase its share of the installed (now already more than 40%), tried to beat the way of the business sector and alternative channels (banks, for example), move away but it has given the results enough to continue to fuel rapid growth. Despite this success the Galaxy S7 has made us forget for a while ‘the real crux of the matter, but now, in the wake of Note 7, comeback afloat.
The real gripe Samsung Mobile is not a phone that goes up in smoke but the current business model. The only hardware approach in the smartphone industry is destined to choke under a too low margins for huge corporations. It is a story that teaches him: in electronics do not remain leaders for long periods. The big European brands have folded to the Japanese; the Japanese and the Koreans; Koreans now are beginning to have their beautiful trouble with the Chinese. In telephony, just as an example, the leadership Nokia, given for steel, was dissolved in a few seasons. Evidently, in the hardware world, the Power wears out those who have it.
The collective oversight of all the Eastern Case has been to underestimate the power of software and operating systems, in a world that – it was clear several years ago – he was focusing on ecosystems: Japanese , Korean and Chinese have been blessed of having snatched the Western world, and especially the Americans, all production facilities; but they realized that the Americans the “ball” of the operating systems have never sold to anyone else. And so today the cloud, platforms and all services are Google, Apple, Facebook and Microsoft. Those who earn them and Samsung are of the situation are located in the poorest part competitive and attacked in the value chain. Samsung, despite attempts by Bada and Tizen, is still hostage to Android and its Play store: early Pixel models, the Google smartphone “end-to-end”, move the bargaining power more and more on the side of Big G , who is preparing, if it will be necessary, in undermining relations with Samsung; and it will continue to dictate terms to Samsung which instead can not, at least for the moment, do without Android. Hope for a European antitrust resolute intervention appears only a solution B.
All this happened before the story notes 7 and this is the point at which the management of Samsung must respond. The “flare-ups” of Note 7 is a detail, the litmus test of a society that, in the anxiety of growth, tried to push their products more than limit; and when you press the accelerator is stronger easier to crash. The Notes 7 – we are sure – will soon be forgotten; Other issues, however, remain on the table forcefully. Samsung has capital and capacity to overcome the impasse, but this will not happen until the real problem will not be brought up by top management and squarely faced. Otherwise it will continue to look to the finger and not the moon.