Samsung grows bigger, but can't mesmerize consumers | business | Hindustan Times
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Samsung grows bigger, but can't mesmerize consumers

The company has traveled far from its roots as a seller of cheap appliances in the 1970s and 1980s when South Korean products were more likely to be panned than praised internationally.

business Updated: Oct 03, 2011 16:41 IST

If you own a consumer electronics gadget, there's a good chance something from Samsung makes it tick.

The company has traveled far from its roots as a seller of cheap appliances in the 1970s and 1980s when South Korean products were more likely to be panned than praised internationally.

Over those decades it has grown to become the world's biggest manufacturer of memory chips and LCDs _ key components that let PCs, digital music players and smartphones store data and display it on flat, high-resolution screens. And they are inside the company's own finished consumer products such as its top selling TVs and No 2-ranked smartphones.

But Samsung still has a perception problem. It may be massive and its products known for high quality, but it has yet to mesmerize consumers.

Sue Chung is someone the company should be winning over. Young, Korean and studying for grad school, she uses Apple's iPhone for reasons including ease of use and a positive feeling about its maker.

``The image is very important,'' she said, sitting in a Seoul coffee shop. ``Apple's image is very free and more open.''

Within South Korea a searingly ambitious nation that obsesses over its international standings in anything measurable pride in Samsung's achievements is leavened by comparisons with Apple Inc. and its quarter century of game-changing products such as the Macintosh computer and iPhone.

If Samsung is to live up to the vaulting ambitions of its homeland and its top executives, many feel it must move beyond being a highly efficient imitator to creating products so original and seductive in function and design they become icons of consumer culture. Being big alone no longer cuts it.

Illustrating Samsung's heft, its net profit last year was more than five times the combined earnings of Japanese rivals Panasonic Corp., Sharp Corp., Toshiba Corp., Hitachi Ltd. and loss-making Sony Corp. Total sales in 2010 came to a record 154.6 trillion won ($136.6 billion), making Samsung the world's biggest technology company by sales.

Yet even bigger dividends can come from vision such as that possessed by Apple's Steve Jobs or Akio Morita, the late co-founder of Sony, which popularized music-on-the-go with the 1979 introduction of its Walkman music player.

Apple has a market capitalization of about $350 billion, while Samsung, which has seen its share price slump 11 percent this year, is worth much less about $105 billion.
Tony Michell, a Seoul-based business consultant and author of a book on Samsung, said that the company's dilemma is how to take advantage of its deep well of domestic brainpower.

``Koreans are immensely creative but their traditional culture of hierarchy doesn't let them be creative,'' he said. ``And so Samsung has this problem that it has at the moment: a heavy cultural conservatism which is preventing full creativity.''

A global intellectual property battle under way with Apple over smartphone and tablet computer technology has highlighted one of the perils of playing catch-up.

The Cupertino, California-based Apple, which spurred the smartphone boom with the launch of its iPhone in 2007, slammed Samsung in April by filing a lawsuit in the United States alleging the product design, user interface and packaging of its Android-based Galaxy brand of products ``slavishly copy'' the iPhone and iPad.